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Corporation ABC just paid dividend of $1.25 per share. ABC promises to increase its dividend payment at 7% per year for the next 3 years,
Corporation ABC just paid dividend of $1.25 per share. ABC promises to increase its dividend payment at 7% per year for the next 3 years, then the dividend will increase at 5% forever. The current market price is $30 per share. The discount rate is 10%. Which of the following statements is correct? (Please select the closest answer) . ABC's price applying DDM is $30 00 XYZ stock is fairly priced Ob ABC's price applying DDM is $27.71 XYZ stock is overpriced O c. Od ABC's price applying DDM is $32.71 XYZ stock is underpriced ABC's price applying DDM is $27.71 XYZ stock is underpriced ABC's price applying DDM is $32.71. XYZ stock is overpriced
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