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6. Akua is evaluating the expected performance of two common stocks, Furhman Labs Inc. and Garten Testing Inc. He has gathered the following information: The
6. Akua is evaluating the expected performance of two common stocks, Furhman Labs Inc. and Garten Testing Inc. He has gathered the following information: The risk-free rate is 5% The expected return on the market portfolio is 11.5% The beta of Furhman stock is 1.5. The beta of Garten stock is . 8. Based on his own analysis, Akua's forecasts of the returns on the two stocks are 13.25% for Furhman stock and 11.25% for the Garten stock. Calculate the required rate of return for Furhman Labs stock and for Garten Testing Stock. Indicate whether each stock is undervalued, fairly valued, or overvalued
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