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Taylor, Inc., stock has a beta of 1.4 and an expected return of 13.3 percent. The risk-free rate is 3.3 percent and the expected market
Taylor, Inc., stock has a beta of 1.4 and an expected return of 13.3 percent. The risk-free rate is 3.3 percent and the expected market portfolio return is 11.2%. What is the required return on this stock? And is it overvalued or undervalued?
A.
10.36% and undervalued
B.
10.36% and overvalued
C.
13.3% and exactly valued
D.
14.36% and undervalued
E.
14.36% and overvalued
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