3.(13 points) XYZ Corp currently pays out 100% of its earnings to shareholders as dividends. It expects to yield $5 earnings per share forever starting next year (exactly one year from now). The market risk premium is 10%, and the risk-free rate is 5%. XYZ Corps stock beta is 1.2. (a) (3 points) What is the required rate of return for XYZ Corp stocks? (b) (4 points) Calculate its stocks current intrinsic value if the firm keeps its current payout policy forever. (c) (6 points) Assume that XYZ Corps ROE declines to 8%. The management decides to pay out only 30% of its earnings starting from the next years dividend and forever after, so that it can reinvest the rest in the growth opportunity. Suppose this growth opportunity lasts forever, what is the present value of its growth opportunity (PVGO)?