Connor and Nathan have independently analyzed a stock for potential inclusion in the

equity portfolio.

Connor has used the DDM growth model and calculated an intrinsic value of $$20\mathrm{.}60/$

share based on a $5\%$ growth rate.

Nathan has used the DDM growth model and calculated an intrinsic value of $$14\mathrm{.}71/$

share based on a $3\%$ growth rate.

If the shares are currently trading at $$11\mathrm{.}44,$ next year's dividend is $$1\mathrm{.}03,$ and the cost of

equity $(k)$ is $10\%,$ should the firm BUY $/$ SELL $/$ or HOLD shares based on Connor's

analysis?

Not enough information

SELL

BUY

HOLD