The expected return on some company's stock is 11.5%. The stock's dividend is expected to grow at a constant rate of 4.5%, and it currently sells for $50 a share. Which of the following statements is CORRECT? The stock's dividend yield is 7%. The stock's dividend yield is 6%. The stock's dividend yield is 5%. The stock price is expected to be $50 a share one year from now. The stock price is expected to be $46 a share one year from now. QUESTION 2 A company will issue new common stock to finance an expansion. The existing common stock just paid a $1.25 dividend, and dividends are expected to grow at a constant rate 5% indefinitely. The stock sells for $45, and flotation expenses of 6% of the selling price will be incurred on new shares. The beta of this company is 1.34. What is the cost of new common stock for this company? 11.19% 10.16% 9.13% 12.22% 8.10%