Problem $11-08$

beta coefficient of $0\mathrm{.}89$ while the beta coefficient of firm $B$ is $1\mathrm{.}12.$

these two stocks using the dividend$-$growth model? Do not round intermediate calculations. Round your answers to two decimal places.

Stock A: $

Stock B: $

b$.$ Why are your valuations different?

The beta coefficient of

is higher, which indicates the stock's return is $-$Select$-$ hat$(v)$ volatile.

c$.$ If stock $A^{\text{'}}$ s price were $$51$ and stock B$\text{'}$s price were $$55,$ what would you do$?$

Stock $A$ is

and

be purchased.

Stock B is

and $-$Select$-$ hat$(v)$ be purchased.