Compare the required return on these stocks

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Reference no: EM131831158

Company Beta

A. Nike (NKE) 0.41

B. VMWare (VMW) 0.78

Nike required rate of return is 5.65%

VMWare required rate of return is 8.69%

Find on the Internet the 52-weeks change of the stock price. Compare the required return on these stocks calculated using CAPM against their historical return over the last 52 weeks. Is there a difference between these returns? Are these stock overvalued, undervalued, or properly valued? Why? In accordance with your founding, is it reasonable for the investor to buy any of these stocks? Explain your answers.

Reference no: EM131831158

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