The board of directors of API, a relatively new electronics manufacturer, has decided tobeginpaying a common stock dividend to increase the attractiveness of the stock in the free market. The board plans to pay $3.50 per share in the coming year (i.e., next year) and anticipates that its future dividends will increase at an annual rate consistent with that experienced over the period from 2009 - 2012 (see below). The company currently has a beta of 1.2, the rate of return for the market is expected to be 10% and the risk-free rate is currently 2%. Given this scenario, what is the current value of API's common stock? If the current market price is $50.00 per share, should you purchase thisstock?Briefly, explain your answer.

YearDividend

2012$3.33

2011$3.19

2010$3.05

2009$2.92