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As a security analyst, you expect that Kennesaw Corp. stock price to increase from $42 to $49 over the next year. Based on your analysis
As a security analyst, you expect that Kennesaw Corp. stock price to increase from $42 to $49 over the next year. Based on your analysis from the last ten years data, the average annual return on the S&P 500 has been 12.5% and the average yield to maturity on the 90-day Treasury bill is 3.5%. If Kennesaw Corp. has a beta of 1.65, would you purchase the stock? 1) Yes, because it is overvalued 2) No, because it is overvalued 3) No, because it is undervalued 4) Yes, because it is undervalued 5) Yes, because the expected return equals the estimated return
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