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The company's beta is 0.95, its dividend growth rate is 7.7%, and just yesterday it paid a dividend of $1.55 . The economy wide risk

The company's beta is 0.95, its dividend growth rate is 7.7%, and just yesterday it paid a dividend of $1.55 . The economy wide risk free interest rate is 4.5%, and the expected risk premium for the market portfolio is 9.0%. Find the stock's intrinsic value using the dividend constant growth model and the required rate of return implied by Capital Asset Pricing Model. Which statement is most accurate?

a.

Intrinsic value is $31.20 and if the stock price is $40.56 you should buy it

b.

Intrinsic value is $27.13 and if the stock price is $40.56 you should buy it

c.

Intrinsic value is $31.20 and if the stock price is $28.08 you should buy it

d.

Intrinsic value is $35.88 and if the stock price is $40.56 you should not buy it

e.

Intrinsic value is $27.13 and if the stock price is $28.08 you should buy it

I know how to get the first part of the answer but how do you get the second part?

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