Stock A and stock B have just paid an annual dividend of $8. The dividend is expected to grow at an annual rate of 2%. Stock A has a beta of 0.6 and stock B has a beta of 1.5.

The risk-free rate is 3% and the expected return on the market portfolio is 6%.

What is the value of stock A? What is the value of stock B? Attempt 1/10 for 10pts. If stock A has a market price of $294 and stock B has a market price of $146, what investment makes sense? Buy stock A, since it has a higher market price Buy stock B, since its value is more than its market price. Buy stock B, since it has a lower market price Buy both stocks Buy stock A, since it has a higher value. Buy neither stock