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The common stock of ABC, Inc. has a current market price of $52 per share. Dividends have been $5 a share for several years and

The common stock of ABC, Inc. has a current market price of $52 per share. Dividends have been $5 a share for several years and are not expected to change. The dividend yield of the stock of comparable companies is 10%. Which recommendation would you make regarding ABC, Inc. stock?

Please explain why the answer is (D) Don't purchase for more than $50 per share.

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