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Suppose the risk - free rate of return is 4 percent and the market risk premium is 7 . 5 percent. Stock Q , which
Suppose the riskfree rate of return is percent and the market risk premium is percent. Stock Q which has a beta coefficient equal to is currently selling for $ per share. The company is expected to grow at a percent rate forever, and the most recent dividend paid to stockholders was $ per share. Is Stock Q correctly priced? Explain.
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