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The risk - free rate of return is 2 percent, and the expected return on the market is 8 . 5 percent. Stock A has

The risk-free rate of return is 2 percent, and the expected return on the market is 8.5 percent. Stock A has a beta coefficient of 1.4, an earnings and dividend growth rate of 8 percent, and a current dividend of $3.10 a share. Do not round intermediate calculations. Round your answers to the nearest cent.
A. What should be the market price of the stock? $
B. If the current market price of the stock is $122.00, what should you do?
The stock(should or should not, select one)be purchased.
C.If the expected return on the market rises to 14.5 percent and the other variables remain constant, what will be the value of the stock? $
D. If the risk-free return rises to 4 percent and the return on the market rises to 15.5 percent, what will be the value of the stock? $
E. If the beta coefficient falls to 1.3 and the other variables remain constant, what will be the value of the stock? $
F. Explain why the stocks value changes incthroughe.
* The increase in the return on the market(increases or decreases, select one)the required return and (increases or decreases, select one)the value of the stock.The increase in the risk-free rate and the simultaneous increase in the return on the market cause the value of the stock to(increase or decrease, select one).The decrease in the beta coefficient causes the firm to become (less or more, select one)risky as measured by beta, which(increases, or decreases, select one)the value of the stock.
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