QUESTION 5 Some Model Assumtions and Restrictions Read Section 9-5D: Required Conditions for the Constant Growth Model Select all below that are assumptions of this model The growth rate (g) can be zero- this is the perpetuity formula in Chapter 5 The Required Rate of Return (r) must be larger than the Growth rate (g) The growth rate remains constant - this is an assumption of the model The Required Rate of Return can be negative QUESTION 7 Solve for Required Rate of Return (r) Do you remember how to solve for Required Return using the CAPM (from Chapter 8) Red Raider Corp. common stock has a beta of 0.5. If the risk free rate of return is expected to be 3.8% and the market rate of return is 12%, what is the required return on Red Raider Corp's common stock? Include answers as a % to two decimals, for example 8.34% should be entered as 8.34 Be mindful fo the difference between the Market Rate of Return and the Market Risk Premium