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Assume that the share price is currently $120 for stock X. You think that next year dividend will be $1.5 per share, while the dividend
Assume that the share price is currently $120 for stock X. You think that next year dividend will be $1.5 per share, while the dividend in two more years will reach $1.9 per share, at which point the stock could be sold for $130. Assume that the appropriate discount rate for the stock is 8%. Using this information, compute the fundamental value of the stock. What is your recommendation for this stock?
Group of answer choices
114, buy
114, sell
124, sell
124, buy
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