Assume equilibrium expected returns are given by CAPM. The riskless rate is 3%, the market risk premium is 9%, the beta of stock X is 1.5, and X = 4%. Shareholders expect that, one year from today, the price of X will be E() = $120 and X will distribute a 4$ per share dividend. Is stock X correctly priced, over-priced, or under-priced? Calculate the difference today (if any) between X

Assume equilibrium expected returns are given by CAPM. The riskless rate is 3%, the market risk premium is 9%, the beta of stock X is 1.5, and P _{0}, and its correct price.P _{1}) = $120 and X will distribute a 4$ per share dividend. Is stock X correctly priced, over-priced, or under-priced? Calculate the difference today (if any) between X??s actual price, alphaX = 4%. Shareholders expect that, one year from today, the price of X will be E(