a) The expected market return, Rm, is 11%, the risk-free rate, Rf, is 2%, and Whitehursts Beta is 1.5. Using the capital asset pricing model, what is the appropriate discount rate for Whitehurst Corporation?

b) Calculate all the future dividends given the respective growth rates, including the value for the constant growth dividend stream after year 6.

c) What is the intrinsic value of Whitehurst corporation? Is the stock over- or undervalued? Would you recommend to buy the stock today?

Please Show Work. Thank you!

You are an analyst for Money Makers Incorporated and your CEO has tasked you with figuring out if Whitehurst Corporation is an undervalued stock. Whitehurst Corporation has just paid a dividend of 3$. Because Covid-19 is not improving much, you have low expectations for the market for the next years. You hence believe that Whitehurst Corporation will only grow dividends at 1% for the next 2 years. You believe that Whitehurst Corporation runs a great business model otherwise and will be able to grow Dividends at 3% in year 3, and even at 5% for the years 4 to 6. After year 6 you believe the company's dividend will grow at 2% forever. Whitehurst company currently trades for 31$