Is it a bargain if its selling at $76 a share

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Reference no: EM13286519

The Pancake Corporation recently paid a $3 dividend and is expected to grow at 5% forever. Investors generally require an expected return of at least 9% before they'll buy stocks similar to those of Pancake.

a. What is Pancake's intrinsic value?
b. Is it a bargain if it's selling at $76 a share?

Reference no: EM13286519

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