A share of stock with a beta of $0\mathrm{.}85$ now sells for $$58.$ Investors expect the stock to pay a year$-$end dividend of $$2.$ The T$-$bill rate is $4\%,$ and the market risk premium is $7\%.$

Suppose investors believe the stock will sell for $$60$ at year$-$end. Calculate the opportunity cost of capital. Is the stock a good or bad buy? What will investors do$?$

At what price will the stock reach an $$equilibrium$$ at which it is perceived as fairly priced today?