单选题 An analyst believes that EFG will pay a $1 dividend a year from now, and will be priced at $23 per share immediately following the dividend. The risk-free rate is 4%, and the analyst forecasts an expected market return of 12%. EFG has a beta of 0.75 and a current price of $ 22. Based on this information:

A、

A. EFG is overvalued.
B、

B. EFG is undervalued.
C、

C. EFG is fairly priced.

【正确答案】 A

【答案解析】The expected return based on CAPM for EFG is 4%+0.75×(12%-4% )=10%. At $22, the expected return based on forecast prices/dividends for EFG is 24/22-1=9.09%. Thus, at $22, EFG is overvalued.