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The beta of company A is 1.35 while for company B it is 1.58. The expected market return is 12.5% and the risk-free rate is
The beta of company A is 1.35 while for company B it is 1.58. The expected market return is 12.5% and the risk-free rate is 2.5%. An analyst estimates company A's expected return to be 14%, while company B's expected return 17%. Based on the SML, how company A and B are most likely valued? A is undervalued; B overvalued O A is undervalued; B is undervalued A is overvalued; B is undervalued O A is overvalued; B is overvalued A is properly value; B is undervalued
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