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Problem $11-08$

Two stocks each currently pay a dividend of $$1\mathrm{.}00$ per share. It is anticipated that both firms$$ dividends will grow annually at the rate of $4$ percent. Firm A has a beta coefficient of $0\mathrm{.}94$ while the beta coefficient of firm B is $1\mathrm{.}3.$

If U$.$S$.$ Treasury bills currently yield $5\mathrm{.}3$ percent and you expect the market to increase at an annual rate of $8$ percent, what are the valuations of these two stocks using the dividend$-$growth model? Do not round intermediate calculations. Round your answers to two decimal places.

Stock A: $

Stock B: $