Is the firm under or overvalued? Don't forget to incorporate the 5% margin of error. Overvalued because it is selling for more than the upper limit of $33.87 Overvalued because it is selling for more than $36 Undervalued because it is selling for less than the upper limit of $44 It could be over or under as one method is more than $40 and the other less than $40 Use the following information to answer questions 13 - 16. A stock is currently selling for $40. The expected growth rate for the stock is 4%; The return on the market is 8%; The earnings for the firm is $3 per share; The beta for the stock is 1.1. The P/E for the Industry is 12: The dividend that was just paid is $1.25. The risk-free rate is 2.5%. What is the firm's required return? O 6.05% 19.896 8.56% 9.1% What is the value of the stock using the dividend discount model (also known as the Gordon Growth Model)? $28.51 $27.41 $32.50 $22.34 What is the value using the P/E method? $4.50 $25.14 $36 $12