A company has present earnings per share of $4, and you calculate the stock's intrinsic value at $48. The stock's present price-earnings rate is 15.
A) The stock is undervalued in the market.
B) The fairly priced price-earnings rate is too high.
C) The market has a higher required rate of return than your required rate of return.
D) If owned, you should sell the stock.
Correct Answer:
Verified
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