HMTV has planned on diversifying into the dual-PVR field. As a result, HMTVs beta would rise to 1.6 from 1.2 and the expected future long-term growth rate in the firms earnings would increase from 12% to 16%. The expected market return is 14%; the risk-free rate is 7%, and the current dividend is $0.50. Should HMTV undertake the expansion? Yes, the stock price is expected to increase $9.89 Yes, the stock price is expected to increase $7.61 No, the stock price is expected to decrease $3.38 No, the stock price is expected to decrease $8.28

A) Yes, the stock price is expected to increase $9.89 B) Yes, the stock price is expected to increase $7.61 C) No, the stock price is expected to decrease $3.38 D) No, the stock price is expected to decrease $8.28