Question
You obtained the following information for the Walmart stock: Market price per share at t=0, P , is $50. Expected price per share at t=1,
You obtained the following information for the Walmart stock: Market price per share at t=0, P , is $50. Expected price per share at t=1, E(P ), is $56. Expected dividend per share during this time period, E(D ), is $1.5. R =.05 Beta for the stock=.6 Market risk premium (R -R )=.08 Is the stock currently over- or under-priced?
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Valuation Measuring and managing the values of companies
Authors: Mckinsey, Tim Koller, Marc Goedhart, David Wessel
5th edition
978-0470424650, 9780470889930, 470424656, 470889934, 978-047042470
