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TechNo Corp is a rapid-growth IT firm. TechNo expects to grow at 20% for the next four years. After year four, growth will moderate at
TechNo Corp is a rapid-growth IT firm. TechNo expects to grow at 20% for the next four years. After year four, growth will moderate at 4.75%. TechNo expects to pay a dividend of $1.25 per share next year. If TechNo's required return is 10.5% and the stock is currently selling at $35.21 per share, is the stock fairly valued? If not, by how much is it over- or under-valued? No, the stock is under-valued by $3.67 per share No, the stock is over-valued by $2.55 per share Yes, the stock is fairly valued. No, the stock is under-valued by $2.55 per share No, the stock is over-valued by $3.67 per share
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