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Your brother-in-law, a stockbroker at Invest Inc. is trying to sell you a stock with a current market price of $25. The stock's last dividend

Your brother-in-law, a stockbroker at Invest Inc. is trying to sell you a stock with a current market price of $25. The stock's last dividend (D0) was $2.00, the earnings and dividends are expected to increase at a constant growth rate of 10 percent. Your required return on this stock is 20 percent. From a strict valuation standpoint, you should ........ Select one: a. Not buy the stock; it is overvalued by $3.00 b. Buy the stock; it is fairly valued. c. Not buy the stock; it is overvalued by $2.00 d. Buy the stock; it is undervalued by $3.00 e. Buy the stock; it is undervalued by $2.00

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