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ETHICS PROBLEM Mofis is trying to value the stock of Generic Usity, Inc, which is clearly not growing at all. Generic declared and paid a

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ETHICS PROBLEM Mofis is trying to value the stock of Generic Usity, Inc, which is clearly not growing at all. Generic declared and paid a 5 dividend last year. The required retum for utility stocks is 11%. Missa is unsure about the financial reporting integrity of Generic's finance team. She decides to add an extra 1% "credibility is premium to the required return as part of her valuation analysis a. What is the value of Generic's ock, assuming that the financials are trustworthy? b. What is the value of Generic's stock, assuming that Missa includes the extra 15 credibility risk premium? 6. What is the difference between the values found in parts a and b, and how might one interpret that difference? a. The expected value of Generic's stock, assuming that the required rate of return for utility stocks is applicable to Generic Uity Inc., is (Round to the nearestent)

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