Question
Suppose you are considering buying a stock. The stock is currently trading for $75. You expect the price in one year to be $76 and
Suppose you are considering buying a stock. The stock is currently trading for $75. You expect the price in one year to be $76 and it will pay a dividend of $2. You estimate the stocks beta at 0.9, the risk-free rate at 2%, and the expected return on the market at 7%. According to the CAPM, should you consider purchasing this stock? LO3 Suppose you are considering buying a stock. The stock is currently trading for $75. You expect the price in one year to be $76 and it will pay a dividend of $2. You estimate the stocks beta at 0.9, the risk-free rate at 2%, and the expected return on the market at 7%. According to the CAPM, should you consider purchasing this stock? LO3 The intrinsic value is $76.37. The current price $75. You should consider buying the stock. The intrinsic value is $73.24. The current price is $75. You should consider buying the stock. The intrinsic value is $75. The current price should be $73.24. You should consider buying the stock. The intrinsic value is $76.37. The current price $75. You should not consider buying the stock.
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