5%. The weighted average cost of capital is 12%. A) Using CAPM, estimate the required rate of return. B) What discount rate will you use to value this stock, weighted average cost of capital of required rate of return? Why? C) Estimate the stock's intrinsic value. D) As an analyst, would you recommend this stock to a client who is looking for stocks to buy? Why? 2. J.C. Penny (JCP) stock current dividend paid is S0.50. You believe that a stable growth rte of 4% is an appropriate description of the long-term prospects of JCP stock. Using CAPM, you estimate the required rate of return as 5.3%. A) What model would you use to estimate the fair price for JCP stock? B) Using the model stated in (A), estimate this fair price. C) Would you purchase JCP stock if it is currently trading at $45 per share? Why D) Estimate the stable growth rate that would justify the current trading price of $45