The below security market line (SML) shows the relationship between beta and expected return. Assume that the CAPM holds and expectations of stocks' returns and betas are correctly measured. SML E A H. D M B B Which statement is NOT correct? O a Stock C is overpriced. O b. The price of Stock A should rise when investors realise it's mispriced. O c. Stock E has more systematic risk than the market portfolio. O d. Stock D has a negative excess return (a negative alpha). Rational investors should sell Stock B A firm has a debt-to-equity ratio of 2:1. The firm's debt beta is 0.7. Five-year government bonds yield 6% pa with a coupon rate of 5% pa. The market's expected dividend return is 3% pa and its expected capital return is 7% pa. The firm stock's next dividend is expected to be $1, paid one year from now. Dividends are expected to be paid annually and grow by 1% pa forever. The current stock price is $10. The corporate tax rate is 30%. Assume a classical tax system. Which statement is NOT correct? O a. The expected return on equity is 11% pa. O b. The expected return on debt is 8.8% pa. Oc. The beta of the firm's equity is 1.65. Od. The beta of the firm's assets is 0.883. Oe. The firm's after-tax WACC is 7.77% pa