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Can you please provide the explanation and formula to get the correct answer? Thanks, You obtained the following information for the Walmart stock: Market price

image text in transcribedCan you please provide the explanation and formula to get the correct answer?

Thanks,

You obtained the following information for the Walmart stock: Market price per share at t=0,P0, is $50. Expected price per share at t=1,E(P1), is $56. Expected dividend per share during this time period, E(D1), is $1.5. RF=.05 Beta for the stock =6 Market risk premium (RMRF)=.08 Is the stock currently over-or under-priced? Select one: a. Under-priced b. Over-prices. The correct answer is: Under-priced

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