What is the intrinsic value of stock

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Reference no: EM133305909

You are considering adding a stock security to your client's portfolio. The stock last paid a dividend per share of $2.50 and dividends are expected to grow by 3% per year. Investors are requiring a 10% return currently on this stock. The stock's current market price is $40.00.

1. What is the intrinsic value of this stock? Show all work for full credit.

2. Is this currently a good buy?

Reference no: EM133305909

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