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Questions (14-16) are based on the information that follows. Initex Corporation's stock trades at $138.64.B - 1.10, RM -15%. Rpf = 5% and it pays

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Questions (14-16) are based on the information that follows. Initex Corporation's stock trades at $138.64.B - 1.10, RM -15%. Rpf = 5% and it pays the following dividends. Do =$4.24; D1 = $4.80; D2 =$6.40; D3 =$8.30. After that dividends grow at the constant rate of 12% forever 15. You believe strongly in your valuation model. The best course of action if you already own the stock is to? (a) Sell it as soon as possible. It is 5.0% overvalued and it is due for a price correction downwards. (b) Hold on to it. You have bought a stock that is 15% undervalued, and is due to increase in price shortly. (c) Do nothing as the stock is fairly priced and plots along the SML. (d) Sell it as soon as possible. It is 8.0% overvalued and is due for a downward price correction (e) Hold on to You have bought a stock that is 18.5% undervalued and it is due to increase in price shortly

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