QUESTION 1 The risk-free rate of return is 5%, the expected rate of return on the market portfolio is 18%, and Zebra Corp's stock has a beta coefficient of 1.2. Dividends of $2/share were just paid and are expected to grow at a 3% rate forever. Assuming the CAPM is valid, would you purchase this stock if it currently sells for $11.75? Yes O No You would be indifferent between buying the stock and not doing so. Cannot be determined QUESTION 2 XYZ Inc. paid a year-end dividend of $3 per share and investors require a 15% rate of return. If the stock is selling for $65, what is the expected dividend growth rate? .0993 O 1038 1962 1365