2. (a) Consider a stock whose net return rates in non-overlapping months are inde- pendent and identically distributed, and have an unknown mean of u and a known standard deviation of o = 10%. The net return rates of this stock in the past 8 months are: 1.0%, 0.2%, 0.6%, 0.3%, 1.0%, 0.1%, 0.5%, and 0.2%. Estimate u using the sample mean, and write out the Mean Squared Error of this estimator. (4pts) (b) A firm has just paid an annual dividend of $5 million. It is expected to pay dividends annually, and the dividends are expected to grow at the annual rate of 12% for the foreseeable future. There are 2 million shares of stock outstanding. The annual discount rate for this type of firm is 20%. According to the Dividend Discounted Model, what is the value of a share of stock of this company? (4pts)