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Hello, Please help with this Finance Investment question ! Question) Suppose you consider buying a share of stock at $40. The stock is expected to
Hello, Please help with this Finance Investment question !
Question)
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 them for $41. The stocks beta has been evaluated to be beta = -0.5
A) Compute the expected return on the stock
B) Discount future price and dividend to compute the intrinsic value of the stock
C) Looking at the stock market price, is it over- or under- valued today by the market?
D) Would you buy or sell this stock?
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