There are two options for the second gap good and bad and for the third gap will invest and will not invest.

Required B asks;

At what price will the stock reach an equilibrium at which it is perceived as fairly priced today?

Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

A share of stock with a beta of 0.82 now sells for $58. Investors expect the stock to pay a year-end dividend of $2. The T-bill rate 5%, and the market risk premium is 8%. a. Suppose investors believe the stock will sell for $60 at year-end. Calculate the opportunity cost of capital. Is the stock a goo bad buy? What will investors do? b. At what price will the stock reach an "equilibrium" at which it is perceived as fairly priced today? Complete this question by entering your answers in the tabs below. Suppose investors believe the stock will sell for $60 at year-end. Calculate the opportunity cost of capital. Is the strick a good or bad buy? What will investors do? Note: Do not round intermediate calculations. Round your opportunity cost of capital calculation as a percentage rounded to 2