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Using a 2-stage DDM, you estimate Stock A has an intrinsic value of $100; however, its market price is $190. You wonder if you made
Using a 2-stage DDM, you estimate Stock A has an intrinsic value of $100; however, its market price is $190. You wonder if you made an assumption that is in error. A possible error might be that your estimate for _____. Select one:
a. the discount rate is too low
b. the stable g2 growth rate of dividends is too high
c. the stable g2 growth rate of dividends is too low
d. the initial g1 growth rate of dividends is too high
e. none of the other answers is correct
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