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6. You consider purchasing a share of stock at Po = $40. The asset is expected to pay a dividend of $3 and to sell

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6. You consider purchasing a share of stock at Po = $40. The asset is expected to pay a dividend of $3 and to sell for $41 in a year. If its 8 = -.5 find out if the asset is underpriced or overpriced. Assume that ry = .05 and E (rM) = .12

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