3. Caleb is investing in the stocks of the company BAT. BAT just paid a dividend of $1 per share (Do = 1). Caleb expects the dividend growth rate to be 3% for the next two years and 2% for another two years. Afterwards, Caleb believes the dividend will stay constant forever. Caleb uses CAPM model to determine the discount rate (expected rate of return) for BAT. He calculates the following: E(rm) = 6%, rf = 1%, and BBAT = 0.6. (a) What should be the stock price based on Caleb's belief and his calculation? [3 points) (b) Suppose that the current traded price of the BAT stock is $30 per share. And Caleb decides to short sell 100 shares of BAT stocks using the margin account. The initial margin requirement is 50%. How much does Caleb have to deposit into the margin account? [1 point] (c) If the stock price goes up to $35 per share and the maintenance margin is 35%, will Caleb receive a margin call? [1 point] (d) Suppose Caleb receives a marginal call and he only has $200 in cash at hand. How can Caleb do in order to bring the margin back to 35%? [2 points]