1 the common stock of alpha manufacturers has a beta of 314, Ask an Expert

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1. The common stock of Alpha Manufacturers has a beta of 3.14 and an actual expected return of 15.26 percent. The risk-free rate of return is 4.3 percent and the market rate of return is 12.01 percent. Based on CAPM, what can you say about the current stock price (underpriced, overpriced, or fairly priced)? Explain.

2. A project requires a $ 7,040 outflow and provides 5 annual cash flows of $1,990. Assume a cost of capital of 9% and find the net present value (NPV).

(Calculate with the formula and round to the nearest cent)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92725121

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