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A stock generates a perpetual cash flow of $5 per share, per year. The market index has an expected return of 11% and the risk
A stock generates a perpetual cash flow of $5 per share, per year. The market index has an expected return of 11% and the risk free rate is 3%. If the stock's listed beta is 0.8 and I believe the true beta is 0.5, how much of a premium will I pay for the stock? Multiple Choice O $53.19 $18.24 O $16.58 O $71.43 A stock generates a perpetual cash flow of $6 per share, per year. The market index has an expected return of 10% and the risk free rate is 4%. If the stock's listed beta is 1.0 and I believe the true beta is 1.2, how much is the stock overpriced? Multiple Choice O $15.88 $13.58 O O $44.12 $33.20
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