An investor with a required rate of return

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Reference no: EM131322327

An investor with a required rate of return of 12.5% is looking at a stock that currently pays a $3.75 dividend per share, has a dividend growth rate of 6%, and is selling in the market for $60.00 per share. What would you recommend?

a) Buy; it meets the buyer's return requirements and is underpriced

b) Buy; it does not meet the buyer's return requirements, but it is underpriced

c) Do not buy; it does not meet they buyers return requirements and is overpriced

d) Do not buy; it meets the buyers return requirements, but is overpriced Please explain reasoning.

Reference no: EM131322327

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