Please solve the question step by step manually by writing it down. Do not use excel or a financial calculator.

Problem 2: (5 Points) Bata Inc. wishes to determine the value of Apex Corp., a company that it is considering acquiring for cash. Bata wishes to use the capital asset pricing model (CAPM) to determine the applicable discount rate to use as an input to the constant-growth valuation model. Apex Corp's is not publicly traded. After studying the betas of firms similar to Apex Corp that are publicly traded, Bata Inc. believes that an appropriate beta for Apex Corp's stock would be 1.25. The risk-free rate is currently 9%, and the market return is 13%. Apex Corp's dividend per share for each of the past 6 years is shown in the following table. Year Dividend Per Share 2021 $1.90 2020 $1.70 2019 $1.55 2018 $1.40 $1.30 2017 a. Given that Apex Corp is expected to pay a dividend of $3.68 next year, determinethe maximum cash price that Bata Inc. should pay for each share of Craft. b. Discuss the use of the CAPM for estimating the value of common stock, and describe the effect on the resulting value of Apex Corp's: (1)A decrease in its dividend growth rate of 2% from that exhibited over the 2017-2021 period. (2) A decrease in its beta to 1