3. You are considering investing in Walmart stock. Walmarts last annual dividend, paid yesterday, was $3.50, and you estimate that dividends will grow by an average rate of 3.75% per year over the long term. The market (other investors) agree with this growth forecast. Your required rate of return for Walmart is 9.5%. The current stock price is $87.25

1. Based on your analysis, what do you think Walmart stock is worth today (what is your estimate of the intrinsic value)? Show all work.

2. Should you invest in Walmart stock (buy) now? Just answer Yes or No.

3. What is the market capitalization rate for Walmart? (calculate the value)

4. Does the market think that Walmart is more risky or less risky than you do? Just answer more or less