You own 1,000 shares of EcoFit stock 3 years ago at Tk

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You own 1,000 shares of EcoFit stock 3 years ago at Tk.42 per share. Currently the stock price is Tk.72
per share. You are considering purchase another 1,000 shares of the stock if the market price is
favourable. However, if the price is not in your favour to buy the shares, you would sell the existing
shares that you own. After a preliminary screening of the information available for finding out the value
of the stock, you are satisfied that the dividend valuation model can be applied for the purpose.

The EcoFIt stock paid relatively high rate of dividends from years 2001 through 2014 growing at about
12 percent per year. However as the industry that EcoFit is in entered the maturity stage of its life cycle,
the dividend growth rate appeared to decline. The company paid the following dividends per share from
2015 through 2020.

Year Dividend per share (Tk.)
2015 5.60
2016 5.95
2017 6.10
2018 6.45
2019 6.85
2020 7.20

You believe that the growth rate of dividend from 2015 through 2020 will continue into in definite
future.

The current market capitalisation rate (market return) at the exchange where EcoFit stock is traded is 12
percent. The risk-free securities that are available to you for investment have been providing an average
of 7 percent return over the last 5 years. The beta coefficient associated with EcoFit stock is 0.48.

Based on the information that you have gathered, will you buy 1,000 additional shares of the stock or
sell the 1,000 shares that you currently own?