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Calculate actual and required rate of return of the following firms. Whether stocks are over or under priced? Firm Beta Po P1 D X 1.2

Calculate actual and required rate of return of the following firms. Whether stocks are over or under priced?

Firm Beta Po P1 D

X 1.2 120 145 5

Y 1 63 68 0

Z 0.7 90 97 2

Rf = 5%,

Rm = 15%

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