two stocks Each currently pay a dividend of $1.75 per share. it is anticipated that both firms dividends will grow annually at the rate of 3%. Firm A has a beta coefficient of 0.88 while the beta coefficient of firm B is 1.35.

a. if US treasury bills yield 2.4% and expect the market to increase at an annual rate of 8.7%, what are the valuations of these two stocks using the dividend growth model.

b. why are your valuations different

c. if stock A's Price were $51 on stock B's price were $42 what would you do?