Using the constant-growth method for our Dividend Discount Model (DDM), find the intrinsic value of a share of Walt Disney Company stock. To do so, enter DIS in the "Quote" box of the CNBC site (find the Historical Closing Price of DIS on October 5, 2021 using the chart). You will also need to find the most recent annual dividend (note that DIS issued two dividends in 2019) and beta (use 5-year beta). You may assume that Disney's growth rate in dividends and earnings is 9%. For the appropriate discount rate (k), you will need to compute the required rate of return on Disney using the Security Market Line (SML) of the CAPM. So, you need to find the risk-free rate of return (use the Yield to Maturity of the 30-year T-Bond on October 5th, 2021) and you may assume that the expected return on the market for the next period is 8.5%.

What is Disney's required rate of return according to the SML of the CAPM?

Question 7 options:

0.8%

2.1%

9.8%

10.3%

None of the above.