Sapling Learning mecmilan learning Considering the purchase price, please sort t

Question

Sapling Learning mecmilan learning Considering the purchase price, please sort the following descriptions according to whether they describe a stock that is undervalued, fairly valued or overvalued Undervalued Fairly Valued Overvalued Tory buys shares in Omicron Inc. for $35 each; an analysis places Otto invests in PottoLotto Inc., where the price of the shares is the same as the value of that share of the business the value at $15 a share. James purchases a share in Henry buys shares in Joney's Soda Mama Mia Pizza for $14. The next day,Company for a price that is significantly less a report comes out stating that the thn what an analyst stated the shares are worth price per share is worth $45 Amos works as a stock analyst and only buys shares of companies whose prices match the levels in his analysis Previous Give Up & View Solution 0 Check Answer Next Exit Hint

Explanation / Answer

Answers:

Statement

Category

Tory buys shares in Omicron Inc. for $35; and analysis places the value at $15 a share

Overvalued

Otto invests in PottoLotto Inc. where the price of the shares is the same as the value of the shares of the business

Fairly Valued

James purchases a share in a Mama Mia Pizza for $14. The next day, a report comes out stating that the price per share is worth $45.

Undervalued

Henry buys shares in Joney’s Soda company ……..

Undervalued

Amos works as a stock analyst and only buys …..

Fairly Valued

Explanation: A stock is called overvalued (undervalued) when the current market price of the stock is more (less) than its price predicted by fundamental analysis of the company. The stock is fairly valued when the current market price of the stock is same as its price predicted by fundamental analysis of the company. Fundamental analysis considers various important financial, economic and other business related factors to determine the intrinsic value of a stock.

Statement

Category

Tory buys shares in Omicron Inc. for $35; and analysis places the value at $15 a share

Overvalued

Otto invests in PottoLotto Inc. where the price of the shares is the same as the value of the shares of the business

Fairly Valued

James purchases a share in a Mama Mia Pizza for $14. The next day, a report comes out stating that the price per share is worth $45.

Undervalued

Henry buys shares in Joney’s Soda company ……..

Undervalued

Amos works as a stock analyst and only buys …..

Fairly Valued

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