It is expected that the security will provide 02 dollar


The risk free rate is 2.5%. The expected return of market portfolio is 7%. There is a security with current price being 10 dollars. Its beta is 0.8. It is expected that the security will provide 0.2 dollar dividend in one year and the expected ex-dividend price in one year is 10.5 dollar.

Is the security fairly priced, under priced or over priced?

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Financial Management: It is expected that the security will provide 02 dollar
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