1) You decide to sell equity (stocks) to raise money for your business idea. You plan to sell 10,000 shares promising each shareholder they will get $10 dividend per year forever. The beta for your firm is 2, the return on the stock market is 12% and the risk-free rate is 4%. How much money will you be able to raise: (A) $500,000 (B) $1,000,000 (C) $1,500,000

2) You decide to sell equity (stocks) to raise money for your business idea. You plan to sell 10,000 shares promising each shareholder they will get $5 dividend per year forever and you will be able to grow these dividends at a rate of 5% forever. The beta for your firm is 1.5, the return on the stock market is 12% and the risk-free rate is 3%. How much money will you be able to raise: (A) $869,565.22 (B) $606,060.60 (C) $740,740.74