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Today Microsoft Corporation trades at $65.00/ shr. Your investment research shows an estimated dividend growth rate of 4.0% and the dividend is currently at $1.56/shr. The risk free rate is assumed to be 2.5% and the market’s expected return is 6.9%. Is the stock under- or overvalued at this price? What if the forward dividend growth rate is more aggressively assumed at 4.7 % ?

Financial Management, Finance

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