Question
Tesla's stock is trading at $237, has a beta of 2.28 and an expected return of 15.0%. The risk-free rate is 1.9% and the market
Tesla's stock is trading at $237, has a beta of 2.28 and an expected return of 15.0%.
The risk-free rate is 1.9% and the market risk premium is 7.3%. This stock is __________blank because the CAPM return for the stock is __________%.
(after calculating the CAPM, choose choice below)
Multiple Choice
undervalued; 14 > CAPM
undervalued; 15 > CAPM 14
Fairly valued; CAPM = 15
overvalued; 16 CAPM >15
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Information Systems Assurance
Authors: David C Chan
2nd Edition
150081458X, 9781500814588
