1) Stocks A and B have the following data A B Beta 1.10 0.90 Constant growth rate 7.00% 7.00% The market risk premium is 6% and the risk-free rate is 6.4%. Assuming the stock market is efficient and the stocks are equilibrium, which of the following statements is correct? >Stock A must have a higher dividend yield than Stock B. >Stock A must have a higher stock price than Stock B. >Stock B's dividend yield equals its expected dividend growth rate. >Stock B mush have a higher required return. >Stock B could have the higher expected return. 2) Which of the following statement is correct? >To implement the corporate valuation model, we discount net operating profit after taxes (NOPAT) at the weighted average cost of capital. >To implement the corporate valuation model, we discount projected free cash flows at the weighted average cost of capital >To implement the corporate valuation model, we discount projected free cash flows at the cost of equity capital >To implement the corporate valuation model, we discount projected net income at the weighted average cost of capital. >The corporate valuation model requires the assumption of a constant groth rate in all years. 3) If in the opinion of a given investor, a stock's expected return exceeds its required return, this suggests that the investors thinks: >The stock should be sold. >Management is probably not trying to maximize the price per share >The stock ix experiencing supernormal growth >Dividends are not likely to be declared >The stock is a good buy. 4) If in the opinion of a given investor, a stock's expected return exceeds its required return, this suggests that the investors thinks: >The stock should be sold. >Management is probably not trying to maximize the price per share >The stock ix experiencing supernormal growth >Dividends are not likely to be declared >The stock is a good buy