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Corporate Finance · End Term · 22 Dec 2024 · September 2024 term · Set QDB3

Question 30: Your opinion is that Cipla stock has an expected rate of…

Question 30

+3 marksOne correct option

Your opinion is that Cipla stock has an expected rate of return of 15%. Cipla has a beta of 1.5. The risk-free rate of return is 5%, and the expected market rate of return is 12%. According to the capital asset pricing model, Cipla is

  1. A

    Overpriced

  2. B

    Underpriced

  3. C

    Fairly priced

  4. D

    Insufficient information

Show answer

Correct answer

  • A

    Overpriced

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Question 30 of 35 in the IIT Madras BS Corporate Finance (Corporate Finance) End Term paper sat on 22 Dec 2024, in the September 2024 term (IIT M DEGREE AN EXAM QDB3 22 Dec 2024). It carries 3 marks.

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