Question: USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Stock 0.8 1.1 2.1 Current Price $12.50 $ 8.25 $25.70 Expected Price $13.10 $ 9.76 $30.04 Expected

 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Stock 0.8 1.1

USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Stock 0.8 1.1 2.1 Current Price $12.50 $ 8.25 $25.70 Expected Price $13.10 $ 9.76 $30.04 Expected Dividend $0.80 $0.20 $0.00 9. What are the expected returns for stocks X, Y, and Z for the next period based on the above prices and dividends? 10. If the expected return on the market is 11.5% and the risk-free rate of return is 4.5%, then what are the required rates of return for stocks X, Y, and Z based on the CAPM? 11. Which of the following statements is correct? a. Stocks X, Y, and Z are undervalued. b. Stocks X, Y and Z are overvalued. c. Stocks X and Y are overvalued and stock Z is undervalued. d. Stocks X and Y are undervalued and stock Z is overvalued. e. Stocks X, Y, and Z are all properly valued

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