A share of stock with a beta of 0.83 now sells for $61. Investors expect the stock to pay a year-end dividend of $3. The T-bill rate is 6%, and the market risk premium is 9%.

a.Suppose investors believe the stock will sell for $63 at year-end. Calculate the opportunity cost of capital. Is the stock a good or bad buy? What will investors do?(Do not round intermediate calculations. Round your opportunity cost of capital calculation as a whole percentage rounded to 2 decimal places.)

opportunity cost of capital ...........?

The stock is a ............ buy and the investors.................

b.At what price will the stock reach an "equilibrium" at which it is perceived as fairly priced today?(Do not round intermediate calculations. Round your answer to 2 decimal places.)