Is brat inc overvalued or undervalued

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Question 1: Your broker has advised you that he believes that the stock of Brat Inc. is going to rise from $20 to $22.15 per share over the next year. You know that the annual return on the S&P 500 has been 11.25% and the 90-day T-bill (government treasury notes) rate has been yielding 4.75% per year over the past 10 years. The beta for Brat is 1.25. Is Brat Inc. overvalued or undervalued? Would you purchase the stock?

Reference no: EM132563076

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