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16 January, 20:46

An analyst with a leading investment bank tracks the stock of Mandalays Inc. According to her estimations, the value of Mandalays Inc.'s stock should be $78.54 per share, but Mandalays Inc.'s stock is trading at $99.25 per share on the New York Stock Exchange (NYSE). Considering the analyst's expectations, the stock is currently:

a. In equilibrium

b. Overvalued

c. Undervalued

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Answers (1)
  1. 16 January, 21:04
    0
    b. Overvalued

    Explanation:

    Overvalued stocks are securities that trade higher than their fair market value, i. e. the value that the company's fundamentals, such as earnings or revenues justify.
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