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1. ABC Stock is currently priced at $75. The stock is expected to be worth $88 in one year and you expect to receive a

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1. ABC Stock is currently priced at $75. The stock is expected to be worth $88 in one year and you expect to receive a dividend of $2.00 a share. The beta of ABC is 2.00. The risk free rate is 3% and the expected return of the stock market is 10%. Should you invest in ABC stock? Explain why. What is the fair value estimate for ABC stock today? This is based on the expected value (price) and cash flows (dividend)

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