What is the no-arbitrage price

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Reference no: EM131883236

For ABC, P/E=15 and is expected to remain constant; forecasted earnings are $4/share

The current price of the stock is $55, and the beta is 0.7.

The risk free rate is 3%, and the expected return on the market is 13%.

Buy or Sell ?

What is the no-arbitrage price?

Please explain the answer.

Reference no: EM131883236

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