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Assume that the share price is currently $110 for stock X. You think that next year dividend will be $1.8 per share, while the dividend
Assume that the share price is currently $110 for stock X. You think that next year dividend will be $1.8 per share, while the dividend in two more years will reach $2.5 per share, at which point the stock could be sold for $135. Assume that the appropriate discount rate for the stock is 10%. Using this information, compute the fundamental value of the stock. What is your recommendation for this stock?
Group of answer choices
A. 115, buy
B. 110, hold
C. 115, sell
D. 105, sell
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