Multiple Choice
Tangshan China's stock is currently selling for $160.00 per share and the firm's dividends are expected to grow at 5 percent indefinitely. In addition, Tangshan China's most recent dividend was $5.50. If the expected risk free rate of return is 3 percent, the expected market return is 8 percent, and Tangshan has a beta of 1.2, Tangshan's stock would be
A) overvalued.
B) undervalued.
C) properly valued.
D) not enough information to tell.
Correct Answer:
Verified
Correct Answer:
Verified
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