You own the stock of Rorison and its current price is $$36\mathrm{.}00/$share$.$ It pays no dividend

today. Rorison has just announced that it intends to initiate a dividend of $$2\mathrm{.}50/$share at the end

of Years $1,2,$ and $3(12,24,$ and $36$ months from now$).$ But an improving future profit outlook

leads you to believe that Rorison$$s Board will increase the Year $4$ dividend by $10\%$ to $$2\mathrm{.}75$; and

then to increase it further by $4\%$ annually for the next $2$ years $($end of years $5$ and $6)$; after which

it will grow by $2\mathrm{.}0\%$ annually forever. You are seeking a $9\%$ annual return.

In light of this, should you buy more Rorison stock at the current $$36$ price; or should you sell

all your current Rorison holdings for $$36$ per share and reinvest the proceeds elsewhere?

Group of answer choices

Buy for $$36\mathrm{.}00$ because the intrinsic value is $$37\mathrm{.}75$

Buy for $$36\mathrm{.}00$ because the intrinsic value is $$38\mathrm{.}72$

Sell for $$36\mathrm{.}00$ because the intrinsic value is $$35\mathrm{.}97$

Buy for $$36\mathrm{.}00$ because the intrinsic value is $$38\mathrm{.}29$

Sell for $$36\mathrm{.}00$ because the intrinsic value is $$34\mathrm{.}78$