Question: 5. Develop a valuation model for a common stock assuming that a company just paid a dividend of $1.75 per share. Its assumed that the

5. Develop a valuation model for a common stock assuming that a company just paid a dividend of $1.75 per share. Its assumed that the dividend will grow at a constant rate of 6% per year forever. The risk-free rate is 6% with an expected return on the market of 12% and a beta of 1.1. Show each step in generating the resulting valuation.

6. Use your analysis of question 5 above to form a table that shows all combinations for the model with the growth rate at 2%, 6%, and 9% and the beta at 0.75, 1.1, and 1.8. Explain why your generated results make financial sense.

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