Question: Return 15% SML 10% 5% 2 Beta Suppose you consider buying a share of stock at a price of $20. The stock is expected to

Return 15% SML 10% 5% 2 Beta Suppose you consider buying

Return 15% SML 10% 5% 2 Beta Suppose you consider buying a share of stock at a price of $20. The stock is expected to pay a dividend of $1 next year and to sell then at $22. The stock risk has been evaluated at B = 1.5. Is the stock underpriced or overpriced? Make sure to provide detailed computation to support your conclusion

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