Assume that the risk-free rate is about 2% and the market risk premium is 8%. If you
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Assume that the risk-free rate is about 2% and the market risk premium is 8%. If you think Bank of America stock price will rise to $27 per share by the end of the year, at which time it will pay a $1 dividend, and you estimate its beta to be 1.2, what should be the fair price for BOA stock today according CAPM? the stock is currently trading at $24.16, would you buy the stock or not?
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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