Answer:
d. The stock's expected return is less than its required return.
Explanation: An undervalued stock is defined as a stock that is selling at a price significantly below what is assumed to be its intrinsic value. For example, if a stock is selling for $50, but it is worth $100 based on predictable future cash flows, then it is an undervalued stock.
Answer:
The stock's expected return is less than the required return
Explanation:
An undervalued stock is a stock whose selling price is significantly below the inherent value.
In order for a stock to be appropriately valued , the expected return should be greater than the minimum required return set by the investor. In a situation where the expected return is lower than than the minimum required return , such a stock is undervalued and the investor will end up making a loss on the investment.
