Hatter Enterprise paid a dividend last year of $3.25, which is expected to grow at a constant rate of 7%. Hatter has a beta of 1.5 and their stock is currently selling for $62. If the market risk premium is 6% and the risk-free rate is 3%, should you purchase Hatter's stock?
A) No, because it is overvalued $7.55
B) Yes, because it is undervalued $7.55
C) No, because it is overvalued $18.95
D) Yes, because it is undervalued $18.95
B
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Hokies, Inc. acquired a desk for $500. The estimated salvage value is $50 and the estimated life is 5 years. What journal entry should Hokies make to record depreciation expense?
a. depreciation expense 90 accumulated depreciation 90 b. depreciation expense 90 desk 90 c. depreciation expense 100 desk 100 d. accumulated depreciation 90 depreciation expense 90 e. depreciation expense 100 accumulated depreciation 100
The government of Ugania had been extending huge amounts of loans to the business enterprises in the country. However, the borrowers failed to generate the profits necessary to repay their debts. As a result, national banks in Ugania had a lot of nonperforming assets on their books, and the Uganian currency was devalued. In this context, the business enterprises in Ugania are most likely to face which of the following type of risk?
A. Ethical B. Economic C. Technological D. Legal E. Sociological