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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

User Fbid
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1 Answer

7 votes

Answer:

b. Overvalued

Step-by-step 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.

User ProbablePrime
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