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) Sally was contemplating the purchase of a stcock priced at $55/share, but is unsure if it is appropriately priced. Analysts expect the stock to
) Sally was contemplating the purchase of a stcock priced at $55/share, but is unsure if it is appropriately priced. Analysts expect the stock to generate 30% return. The stock has a beta coefficient of 2.2. The expected market return is 8% and the 20-year Treasury Bond is yielding 5%. Help Sally determine if the stock is overpriced or underpriced at $55/shr. Show the work to support your answer
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