(a) You observe that Stock A with a beta of 1.2 now has an expected return of 15%. Assume that the risk-free rate is 5% and that the expected return on the market portfolio is 11%. Explain whether Stock A is underpriced or overpriced, using the Capital Asset Pricing Model (CAPM). (2 marks) (b) Suppose stock prices do not reflect the information in firms annual reports. But stock prices fully reflect the information in past stock prices. According to the Efficient Market Hypothesis (EMH), explain whether the market efficiency is weak-form efficiency, semi-strong-form efficiency, or strong-form efficiency. (2 marks) (c) Briefly explain the over-investment problem from the perspective of the agency costs between debtholders and equity holders. (2 marks) (d) Explain the benefit of paying the dividend, from the perspective of agency costs between management and shareholders. (2 marks)