What must occur for a stock to be in equilibrium,that is,for there to be no consistent pressure for its price to depart from its current level?

Question

Quizplus · Accepted Answer

For a stock to be in equilibrium, the expected future returns must be equal to the required return. This means that investors are satisfied with the current price and do not expect to make any abnormal profits in the future. If the expected future returns were greater than the required return, investors would be willing to pay more for the stock, increasing its price and creating pressure for it to depart from its current level. If the expected future returns were less than the required return, investors would be willing to pay less for the stock, decreasing its price and creating pressure for it to depart from its current level. Therefore, only when the expected future returns are equal to the required return is the stock in equilibrium.

What Must Occur for a Stock to Be in Equilibrium,that