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A stock is in equilibrium if its expected return its required return. In general, assume that markets and stocks are in equilibrium ( or fairly
A stock is in equilibrium if its expected return
its required return. In general, assume that markets and stocks are in equilibrium
or fairly valued but sometimes investors have different opinions about a stock's prospects and may think that a stock is out of equilibrium either
undervalued or overvalued Based on the analyst's expected return estimates, Stock A is
Stock B is
and
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