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Jack is considering a stock purchase. The stock pays a constant annual dividend of $4.36 per share and is currently trading at $26.61. Jack's required
Jack is considering a stock purchase. The stock pays a constant annual dividend of $4.36 per share and is currently trading at $26.61. Jack's required rate of return for this stock is 14.5%. Should he buy this stock? The intrinsic value of the stock that Jack is considering is $ (Round to the nearest cent.) Should he buy this stock? (Select the best choice below.) A. Jack should not buy the stock because it is overpriced based on his valuation (it sells for more than the maximum he should pay). If he buys the stock, he would earn more than his maximum required rate of return of 14.5%. B. Jack should buy the stock because it is underpriced based on his valuation (it sells for less than the minimum he should pay). If he buys the stock, he would earn more than his minimum required rate of return of 14.5% O C. Jack should buy the stock because it is overpriced based on his valuation (it sells for more than the maximum he should pay). If he buys the stock, he would not earn his minimum required rate of return of 14.5%. D. Jack should not buy the stock because it is underpriced based on his valuation (it sells for less than the minimum he should pay). If he buys the stock, he would not earn his minimum required rate of return of 14.5%
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