equity

问题如下：

6. Based on the single-stage RI model and Exhibit 2, Castovan should conclude that TTCI is:

选项：

A.

undervalued.

B.

fairly valued.

C.

overvalued.

解释：

C is correct.

Using the single-stage RI model, the intrinsic value of TTCI is calculated as

$\begin{array}{l}{V}_0=B_0+\frac{ROE-r}{r-g}{B}_0\\ =45.25+\frac{01.2-0.087}{0.087-0.045}45.25\\ =80.80\end{array}$

The intrinsic value of €80.80 is less than the market price of €126.05, so Castovan should conclude that the stock is overvalued.