13. You are considering investing in Microsoft (ticker: MSFT) and want to estimate the stock's intrinsic value.

a.What is MSFT's estimated beta using the weekly data?Does Microsoft appear to be more or less risky than the market index?

b.Estimate the required return assuming a 1.74% risk-free rate (10-year UST yield) and 6.2% market risk premium.

c.From Yahoo Finance, the forward annual dividend for the year (D₁) is $2.04.What is the intrinsic value of the stock if dividends are expected to grow at a constant 5% rate forever?Based on your estimation, should you buy this stock?

d.The actual stock price (on 10/11/19) is $140.64.What is the implied annual growth rate that sets the intrinsic value equal to the stock price?

e.Suppose you form a portfolio by investing $50,000 in Microsoft, $100,000 in Amazon, and $80,000 in Google.Assume that Amazon and Google have betas of 1.63 and 0.94, respectively.What is the required return on the portfolio?