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Question 25 1 pts Hershey Corporation has increased its annual dividend by about 3 percent in each of the last 20 years. In the firm's
Question 25 1 pts Hershey Corporation has increased its annual dividend by about 3 percent in each of the last 20 years. In the firm's current annual report, the president of Hershey states that the firm intends to continue with the policy of uninterrupted dividend growth at the same rate. The last dividend paid was $1.04 per share. If your required rate of return is 6.67 percent, and the current market price for Hershey is $47.88, then which of the following statements is true (based on a valuation by the Gordon Growth Model--constant growth DDM)? You should buy shares because the intrinsic value of $51.03 is greater than the $47.88 market price. C If you own shares in Hershey, then you should sell them because the current market price of $47.88 is greater than their intrinsic value of $29.19. You should buy Hershey shares because the intrinsic value of $50.08 is greater than the market price. You should buy shares in Hershey because the market is undervaluing them by $6.28 per share
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