Question 1: Dividend Discount Model for Apple In this problem, you will find the intrinsic value of a share of Apple Inc's stock (ticker: AAPL) using the constant growth dividend discount model. See the "Q1_ValuationData" worksheet in the PS2 template for cash flow and stock pricing data as of October 2017. Key assumptions (see "Q1_ValuationData" for details): Apple's earnings growth rate (g) will be constant at 4% for the indefinite future. Apple's dividend payout ratio (D/E) will be constant. Apple's return on equity (ROE) will be constant at its current value. Apple's required rate of return on equity (k) is given by the CAPM. Apple's required rate of return on equity (k) will be constant. The market risk premium is 5%. a) Fill in all of the missing valuation data, such as dividend yields, payout ratios, ROE, and k, in the PS2 template file. b) If Apple's payout ratio is equal to its long-run sustainable payout ratio, what is the fundamental value of Apple's stock? c) According to this analysis, by what percentage is Apple underpriced or overpriced? d) Based on your valuation analysis in part (b), if the market becomes efficient in one year, what one-year return would you expect from buying Apple at its current price? e) Based on your valuation analysis in part (b), what long-run expected return would you expect from buying Apple at its current price and holding it indefinitely? f) Based on your expectations of returns in parts (d) and (e), would you overweight or underweight AAPL in your overall portfolio