4) A stock with beta 1.4 has 7% return. According to Security Market Line, expected return on a security with the beta of 1.4 is 6%. You should the stock. Eventually, the return on stock will a) Buy, fall b) Buy, rise c) Not buy, fall d) Not buy, rise 5) Suppose a firm has 6.5% return on equity. If the firm restructures it's capital by issuing more equity and reducing debt, the return on equity will according to Modigliani-Miller Proposition a) Fall b) Rise c) Stay the same d) Not enough information