Chartered Financial Analyst Level 2
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An analyst gathers the following information about a company's common stock:
-
Most recent annual dividend: $2.00
-
Expected annual dividend growth rate for next 3 years: 20%
-
Expected dividend growth rate after 3 years: 6%
-
Current share price: $31.00
The analyst considers a security trading within a band of +/- 10% of her estimate of intrinsic value to be fairly valued. If the required return is 17%, the common stock is:
An analyst gathers the following information about a company's common stock:
-
Most recent annual dividend:
$2.00 -
Expected annual dividend growth rate for next 3 years: 20%
-
Expected dividend growth rate after 3 years: 6%
-
Current share price:
$31.00
The analyst considers a security trading within a band of +/- 10% of her estimate of intrinsic value to be fairly valued. If the required return is 17%, the common stock is:
Exam-Like
A
undervalued.
B
fairly valued.
C
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