Question
You estimate the intrinsic value of a stock to be higher than its current market price. Which of the following choices could explain why the
You estimate the intrinsic value of a stock to be higher than its current market price. Which of the following choices could explain why the stock appears undervalued to you?
Check all that apply:
Your estimate of the stock's required rate of return is lower than the market opinion.
Your estimate of the stock's future risk (i.e. beta) is higher than the market opinion.
Your estimate of the long-term earnings growth rate is lower than the market opinion
Your estimate of the future dividend payout ratio is higher than the market opinion.
Your estimate of the stock's future profitability (ROE) is lower than the market opinion.
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