Question:
You consider buying shares in a stock which you expect to
Last updated: 7/12/2022
You consider buying shares in a stock which you expect to hold one year, receiving a dividend just prior to selling the shares. You have access to an analyst forecast for the stock with a target price one year from now (P1) after the dividend should be paid. 50.5 1.2 56 1.4 0.0875 0.0675 Given the analyst's forecast, is the stock over-priced, under-priced, or fairly-priced relative to its risk-adjusted expected return? Cannot determine with the information given Fairly-priced Over-priced Under-priced