What is the probalibity that it is overvalued

Reference no: EM13255562

International Many Foods, Inc's common stock has a beta of 0.9. The stock does not currently pay a dividend, but is expected to appreciate in value from a current price of $15 to $25 in the next 5 years. The risk-free rate is 6 percent and the market risk premium is 7.4 percent. If the standard deviation of the expected return from this stock is 2 percent, what is the probalibity that it is overvalued?

Reference no: EM13255562

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