The risk-free rate of return (rf ) is 2% and the expected market rate of return (rm) is 10%. The shares A, and B, both pay a dividend (D) of $6 a year. The betas for the two shares are A = 0.75 and B = 1.25. The two shares are trading at the same price (P) of $60. Requirements. Answer the following questions: Q1. What are the expected returns on A and B? Q2. What are the expected prices of A and B? Q3. What action would you recommend for A? Q4. What action would you recommend for B? Q5. What would be the expected price of A if its dividend were $8?