GenCap Advisory has just given Banca Mediolanum a strong buy recommendation. As a result, you decide to analyze and value the company’s stock. Here’s what you find: This year Banca Mediolanum paid its stockholders an annual dividend of €4.5 a share, but because of its high rate of growth in earnings, its dividends are expected to grow at the rate of 8% a year for the next five years and then to level out at 4% a year. So far, you’ve learned that the stock has a beta of 1.23, the risk-free rate of return is 2.5%, and the expected return on the market is 10.5%. Using the CAPM to find the required return, put a value on the stock.