If this company paid annual dividend of $8/share at the latest year-end, and the dividend is
expected to grow at 7% for the foreseeable future, what is the rational price of this firm's stock?
If the stock currently trades at $80, is this a “must-buy” or “must-sell”? Why?

The rational stock price using the dividend discount formula we find the price of stock at the level of $114 = $8 / 7%. The division will gives us rational stock price at which company potential stock price can moves up.

From the given circumstances it is ideal for organization to buy the stock at $80 will help investor to capitalize on gain potential upward movement in the stock price expected to the level of $114 in near future.

If this company paid annual dividend of $8/share at the latest year-end, and the dividend isexpected to grow at 7% for the foreseeable future, what is the rational price of this firm's stock?If the stock currently trades at $80, is this a “must-buy” or “must-sell”? Why?​

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If this company paid annual dividend of $8/share at the latest year-end, and the dividend is
expected to grow at 7% for the foreseeable future, what is the rational price of this firm's stock?
If the stock currently trades at $80, is this a “must-buy” or “must-sell”? Why?