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QUESTION

In the problems following, use an equity risk premium of 5.5 percent if none if specified. You have estimated the value per share for Littlefield...

In the problems following, use an equity risk premium of 5.5 percent if none if specified.

You have estimated the value per share for Littlefield Inc., a transportation company, under three scenarios: $5/share under the worst-case scenario, $30/share under the best-case scenario, and $18/share under the most likely scenario. If the stock is trading at $15, would you buy the stock? Why or why not?

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