Calculate the gordon growth model value for prestario stock

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You are the fundamental investor and you estimated a required rated of return on Prestario stock is 8.8% using CAPM. Based on your analysis, you believe Prestario has stable growth rate at 6% and current dividend is $0.50.

Question a) Calculate the Gordon growth model value for Prestario stock.

Question b) The current market price of Prestario stock is $25, Using your answer to question (a), state whether Prestario stock is fairly valued, undervalued or overvalued.

Reference no: EM132495291

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