Question: 4. Now, suppose Upton has a change in management. The new group institutes policies that increase the expected growth rate to 6%. Also, the new

4. Now, suppose Upton has a change in management. The new group institutes policies that increase the expected growth rate to 6%. Also, the new management stabilizes sales and profits, and thus causes the beta co-efficient to decline from 1.2 to 1.1. Assume that RF remains at 3% and rm remains at 8%. After all of these changes, what is Upton's new equilibrium price, assuming D1 increases to $2.15 ? a. SML variables: RF= %;rm= %;b= Solve the SML equation to find rS. b. Gordon Model variables: D1=$ %;rS= % **Note that rs is the solution to the SML equation just solved. Solve the Gordon Model equation to find Po

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