Tangshan China's Stock Is Currently Selling for $160

question 99

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.

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Definitions:

Confidence Interval

A range of values derived from sample statistics that is likely to contain the value of an unknown population parameter with a specified probability.

Mean Time

An average or expected time that represents the central tendency of a set of times.

True Proportions

Refer to the actual relative frequencies of outcomes within a population.

College Success

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