7. Suppose you held a diversified 5 points portfolio consisting of 10 different common stocks, investing $500 in each stock. The portfolio's beta is 1.9. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 0.8 for $500 and use the proceeds to buy another stock with a beta of 1.25. What would your portfolio's new beta be? * O O a) 1.074 b) 2.025 c) 3.865 O d) 4.2 12. London's stock has a required 5 points return of 12%, and the stock sells for $40 per share. The firm just paid a dividend of $1, and the dividend is expected to grow by 30% per year for the next 4 years, so D4 = $1(1.30)4 = $2.8561. After t = 4, the dividend is expected to grow at a constant rate of X% per year forever. What is the stock's expected constant growth rate after t = 4, i.e., what is X?* O a) 5.17% O 5.44% O c) 5.72% O d) 6.34%