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Determine whether the stock is overvalued

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Question - The current price of a stock is $20. It is expected to rise to $22 in one year and pay an annual dividend of $1 during the year. The RF is 4 percent, the ERM is 10 percent, and the stock's beta is 1.6. Determine whether the stock is overvalued, undervalued, or properly valued. Is the stock above, below, or on the SML?

Reference no: EM133034730

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