Suppose the dividends per share of a common stock are expected to be $2.0 at the end of the year and its price per share at the end of the year is expected to be $54.The current price is $50 per share.However, given the systematic risk of the stock, the security market line provides the required expected rate of return of 15% over the year. Is this common stock currently over-valued or under-valued?

If a firm is given credit terms of Net 45 and it does not avail itself of the cash discount of 2%, what is the annual effective cost of not taking the cash discount?