Question 10 3 pts Connor and Nathan have independently analyzed a stock for potential inclusion in the equity portfolio. Connor has used the DDM growth model and calculated an intrinsic value of $20.60 / share based on a 5% growth rate. Nathan has used the DDM growth model and calculated an intrinsic value of $14.71/ share based on a 3% growth rate. If the shares are currently trading at $11.44, next year's dividend is $1.03, and the cost of equity (k) is 10%, should the firm BUY / SELL / or HOLD shares based on Connor's analysis? O Not enough information O SELL BUY O HOLD
Question 10 3 pts Connor and Nathan have independently analyzed a stock for potential inclusion in the equity portfolio. Connor has used the DDM growth model and calculated an intrinsic value of $20.60 / share based on a 5% growth rate. Nathan has used the DDM growth model and calculated an intrinsic value of $14.71/ share based on a 3% growth rate. If the shares are currently trading at $11.44, next year's dividend is $1.03, and the cost of equity (k) is 10%, should the firm BUY / SELL / or HOLD shares based on Connor's analysis? O Not enough information O SELL BUY O HOLD
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Question 10
3 pts
Connor and Nathan have independently analyzed a stock for potential inclusion in the
equity portfolio.
Connor has used the DDM growth model and calculated an intrinsic value of $20.60 /
share based on a 5% growth rate.
Nathan has used the DDM growth model and calculated an intrinsic value of $14.71/
share based on a 3% growth rate.
If the shares are currently trading at $11.44, next year's dividend is $1.03, and the cost of
equity (k) is 10%, should the firm BUY / SELL / or HOLD shares based on Connor's
analysis?
O Not enough information
O SELL
BUY
O HOLD
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