a) McCormick & Company is considering buying a new factory in Largo, Maryland. The company is considering issuing additional common stock to finance the purchase of the factory. McCormick & Company stock has recently paid a dividend payment of $0.52 per share. Dividends are expected to grow 8.5% per year for the next five years. The required return on the stock is 12 percent. Determine the intrinsic value of the stock, also known as today's stock price.

b) McCormick & Company is considering establishing new products in a lew factory in Largo, Maryland. The project is expected to last for 8 years. To determine the right financing option, you need to determine the appropriate discount based on the weighted average cost of capital. The cost of equity is estimated using the capital asset pricing model. Cash flows are assumed to be steady, the nominal risk-free rate for the short-term US government treasury bills is 1.5%, the 10-year government bonds rate is 2.5% and inflation rate is 2.54%. What is the real risk free rate? Then, assume a beta of 1.2 and a market return of 5%. What is the cost of equity?

Note: Need the solution to both the part (a) and (b) with all the steps