First Marblehead raises dividend and buys shares

First Marblehead just announced a substantial increase in dividend to a yield of about 2.6%. In the same announcement, the company reported purchasing about 1.39% of its own shares. If I use a dividend discount model to value FMD, I get a ridiculously high figure—as in 3 to 4 times more than the market price. Earlier in the week, the company released results of the most recent securitization, which were quite encouraging given the current point in the financial aid cycle.

It's hard to stand pat without any cash to add to my current position. But I don't know what I'm willing to sell. I suppose this is a good problem to have.