Question 1 (1 point) Rf=1%, E[RM]=6%. Company ABC has a CAPM beta of 1.2. ABC is currently restructuring and has cut its dividend. Expected dividends are now Year 1 2. 3 4 Later Growth 4.00% Dividend 0 0 5 10 What is the value of ABC? $291 $302 $276 $254 Question 2 (1 point) Rf=1%, E[RM]=6%. Company XYZ has CAPM beta of 0.8, ROE of 8% and retains 1/3 of its earnings. Expected earnings per share next year are $5. What is the value of XYZ? (Round to two decimal places) Your Answer: Answer Question 3 (1 point) Should XYZ increase or decrease the rate at which it retains its earnings? Increase No change Decrease