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Assume that the risk-free rate of interest is 5% and the expected rate of return on the market is 15%. Stock A is currently selling

Assume that the risk-free rate of interest is 5% and the expected rate of return on the market is 15%. Stock A is currently selling at $40 per share. The stock is expected to pay $5 dividends next year, and you expect it to sell then for $50 per share. The stock has a beta of 1.25. Is Stock A currently underpriced or overpriced?

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