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The risk-free rate of return is 4 percent, and the expected return on the market is 8.8 percent. Stock A has a beta coefficient of

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The risk-free rate of return is 4 percent, and the expected return on the market is 8.8 percent. Stock A has a beta coefficient of 1.2, an earnings an dividend growth rate of 6 percent, and a current dividend of $3.10 a share. Do not round intermediate calculations. Round your answers to the near cent. a. What should be the market price of the stock? b. If the current market price of the stock is $62.00, what should you do? The stock -Selectbe purchased c. If the expected return on the market rises to 10.8 percent and the other variables remain constant, what will be the value of the stock d. If the risk-free return rises to 7 percent and the return on the market rises to 11.7 percent, what will be the value of the stock e. If the beta coefficient fails to 1.1 and the other variables remain constant, what will be the value of the stock? f. Explain why the stock's value changes in c through e. The increase in the return on the market the required return andthe value of the stock The increase in the risk-free rate and the crases s increase in the return on the mark The decrease in the beta coefficlent causes to becomeelect the firm to become c risky as measured by beta, whichSelect the value of the stock

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