1. Francis Inc.'s stock has a required rate of return of 10.25%, and it sells for $52.50 per share. The dividend is expected to grow at a constant rate of 6.00% per year. What is the expected year-end dividend, D?
A. $2.34
B. $2.12
C. $2.57
D. $2.23
E. $1.90
2. Company A has a beta of 0.70, while Company B's beta is 1.55. The required return on the stock market is 11.00%, and the risk-free rate is 2.25%. What is the difference between A's and B's required rates of return? (Hint: First find the market risk premium, then find the required returns on the stocks.)
A. 4.99%
B. 6.20%
C. 6.71%
D. 6.60%
E. 5.74%