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1.) Stock A has a beta of 1.2 and a standard deviation of returns of 14%. Stock B has a beta of 1.8 and a standard deviation of returns of 18%. If the risk free rate of return increases and the market risk premium remains constant, then _________. 2)Using the constant growth dividend valuation model and assuming dividends will grow at a constant rate forever; the increase in the value of the stock each year should be equal to ______ Growth rate in dividends Required return on the stock Dividend yield plus the capital gains yield Dividend yield 3. Stock A has a beta of 1.2 and a standard deviation of returns of 18%. Stock B has a beta of 1.8 and a standard deviation of returns of 18%. If the market risk premium increases, then _________. The required rate of return on Stock B will increase more than the required rate of return on stock A. The required returns on stocks A and B will both increase by the same amount. The required returns on stocks A and B will remain the same The required return on stock A will increase more than the required return on Stock B.

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