FM Corporation earns a ROE of $12\%.$ it reinvests one$-$half its earning and pays oit the other half as cash dividends. The cost of capital is $12\%.($c$)$ Suppose you consider buying a share of stock at $$40.$ The stock is expected to pay $$3$

dividends next year and you expect it to sell then for $$41.$ The stock risk has been evaluated

by $b=-0\mathrm{.}5.$ Is the stock overpriced or underpriced?