You have been asked to advise Packard Ltd on their strategy for investment post Covid-19 pandemic. The following information is prepared for economic conditions in 2022/2023. Packard is planning on creating a portfolio by investing 60% of their retained earnings in Stock A and 40% in Stock B. The table below provides the returns on each project in three possible states: Interest Rates Probability Stock A Stock B Decline 0.2 -15% -4% Remain flat 0.2 3% 2% Increase 0.6 25% 8% REQUIRED a) What is the expected return on Stock A and Stock B? (2 marks) b) Calculate the expected return and standard deviation of the portfolio. (6 marks) c) Explain what is meant by unsystematic risk. (4 marks) Stock A paid has just paid a dividend per share of $3.56 and dividends are expected to grow at 5.5% a year forever. The stock has a beta of 0.90, and the Treasury bond (riskless) rate is 6.25%. d) What is the value per share of Stock A using the Dividend Growth Model? (3 marks) e) If Stock A were trading at $80 per share. What would the growth rate in dividends have to be to justify this price? (4 marks) f) Discuss in detail two drawbacks of the Dividend Growth Model.