Assume that you are reading an investment analysis report of a non-US stock . In thereport you find that the CAPM was used to calculate the cost of equity and that theanalyst used the US 10-year Treasury Bond yields for the discount rate and the postwar S & P 500 returns to calculate the market risk premium . If the non-US stock is in acountry with high political and economic turmoil , What can you infer with highikelihood about the analysis ?

The cost of equity for the stock is lower than what it should be None of the other answers are correct More than one of the other statements are correct The stock is likely to be overvalued in the report relative to its appropriate " value The analyst should have used the short-term government bond yields for the risk-freeate