Problem 11-08 Two stocks each currently pay a dividend of $1.10 per share. It is anticipated that both firms' dividends will grow annually at the rate of 5 percent. Firm A has a beta coefficient of 1.07 while the beta coefficient of firm Bis 1.2. a. If U.S. Treasury bills currently yield 5 percent and you expect the market to increase at an annual rate of 8 percent, what are the valuations of 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 -Select- is higher, which indicates the stock's return is -Select- volatile. c. If stock A's price were $42 and stock B's price were $43, what would you do? Stock A is-Select Vand -Select be purchased. Stock B is -Select vand -Select V be purchased