问题如下：
A stock with beta of 0.5 is selling for $30 and pay $4 dividend at year end, if the price should be $32 at year end. The stock is undervalued or overvalued? Assuming the risk-free rate is 8%, expected market return is 16%.
选项：
A.
The sotck is undervalued, investor should buy it.
B.
The stock is overvalued, investor should short it.
C.
The sotck is fairly valued, investor should buy it.
A is correct.
Expected return on CAPM = 8 + 0.5(16 - 8) = 12%
Estimated return on stock = (32 - 30 + 4) / 30 = 20%
The estimated return is higher than expected return on CAPM, indicating that the stock is undervalued, investor should buy it.
我的问题是为什么estimated return on stock的计算中是减30呢？在我的理解中，30并不是year beginning的价格，他也是year end的selling price
