A late penalty of 10% will apply to new answers. Intro Stock A and stock B have just paid an annual dividend of $5. The dividend is expected to grow at an annual rate of 1% Stock A has a beta of 0.7 and stock B has a beta of 1.5. The risk-free rate is 3% and the expected return on the market portfolio is 9%. IB Attempt 1/10 for 9 pts. Part 1 What is the value of stock A? 0+ decimals Submit IB Attempt 1/10 for 9 pts. Part 2 What is the value of stock B? 1+ decimals Submit Part 3 IB Attempt 1/4 for 9 pts. If stock A has a market price of $84 and stock B has a market price of $44, what investment makes sense? O Buy stock A, since it has a higher value Buy stock B, since its value is more than its market price Buy stock A, since it has a higher market price Buy both stocks O Buy stock B, since it has a lower market price Buy neither stock
