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The security market line is estimated to be k=4% + (11.5% -4%). You are considering two stocks. The beta of Ais 1.7. The firm offers

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The security market line is estimated to be k=4% + (11.5% -4%). You are considering two stocks. The beta of Ais 1.7. The firm offers a dividend yield during the year of 3 percent and a growth rate of 9 percent. The beta of B is 1.2. The firm offers a dividend yield during the year of 4.1 percent and a growth rate of 8 percent a. What is the required return for each security? Round your answers to two decimal places. Stock A: % Stock B: %% 2. b. Why are the required rates of return different? being riskler The difference in the required rates of return is the result of -Select c. Since A offers higher potential growth, should it be purchased? Stock A be purchased d. Since B offers higher dividend yield, should it be purchased? Stock B Select be purchased e. Which stock() should be purchased? - should be purchased, Grade i Now Save & Continue

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