Stock A has a systematic risk of A=0.75. The risk-free rate is RF=2%and the return on the market portfolio is RM=12% The last dividend paid was D0=$2.00 The growth rate of dividends in the first period is g1=5% and from the second period on is g2+=0%

1. The price at time 1, P1 is

a. $22.11

b. $21.05

c. $16.67

d. $21.00

e. $23.33

2. The price at time 1, P0, is

a. $22.11

b. $21.05

c. $16.67

d. $21.00

e. $23.33

.