Question
Stock Y has a beta of 0.88 and an expected return of 12%. The risk-free rate is 4% and the market risk premium is 8%.
Stock Y has a beta of 0.88 and an expected return of 12%. The risk-free rate is 4% and the market risk premium is 8%. This stock is:
| A. overvalued | ||
| B. cannot be determined | ||
| C. undervalued | ||
| D. correctly valued |
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Entrepreneurial Financial Management An Applied Approach
Authors: Jeffrey R Cornwall, David O Vang, Jean M Hartman
5th Edition
0367335417, 978-0367335410
