A stock currently costs $18.59 and has a beta of 1.3. The company just paid an annual dividend of $1.13, which you expect to grow by 3.5% per year. You think that the stock is mispriced and expect the price to revert to intrinsic value within a year.

The yield on treasury bonds is 1% and the expected return on the S&P 500 is 7%.

Part1

What is the stock's expected return if it were fairly priced?

Part2

What is the stock's intrinsic value?

Part3

What is the stock's expected alpha?

Part4

What is the expected return over the next year?