ou ve collecteu ue 10110 wing oldini ol your idvolle Idnicidi weusile. 52-Week Price Hi 77.40 LO 10.43 Div PE Yld % Ratio 2.6 6 Close Price 13.90 Net Chg -24 55.81 33.42 3.8 10 -01 40.43 Stock (Div) Palm Coal.36 Lake Lead Grp 1.54 SIR 2.70 DR Dime.80 Candy Galore.32 131.07 50.24 35.00 70.20 13.95 20.74 3.0 5.2 1.5 10 6 28 89.11 15.43 ?? 3.07 -26 .18 According to your research, the growth rate in dividends for SIR for the next five years is expected to be 20.5 percent. Suppose SIR meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5.5 percent indefinitely. Assume investors require a return of 15 percent on SIR stock. According to the dividend growth model, what should the stock price be today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current stock price Based on these assumptions, is the stock currently overvalued, undervalued, or correctly valued? Stock currently If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company: Year 3 Year 4 Year 1 $89.96 Year 2 $105.04 $138.43 High price Low price EPS 71.18 6.61 86.20 9.03 $127.00 76.28 8.69 113.96 10.28 Earnings are expected to grow at 8.5 percent over the next year. a. What is the high target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the low target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. High target price b. Low target price