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Business, 14.11.2019 20:31 karlamiddleschool

Two stocks each pay a $1 dividend that is growing annually at 8 percent. stock a has a beta of 1.3; stock b's beta is 0.8.

a. which stock is more volatile?

b. if treasury bills yield 6 percent and you expect the market to rise by 12 percent, what is your risk-adjusted required rate of return?

c. using the dividend-growth model, what is the maximum amount you would be willing to pay for each stock?

d. why are your valuations different?

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