Assume a major investment service has just given Big Lake Realty its highest investment rating, along with a strong buy recommendation. As a result, you decide to take a look for yourself and to place a value on the company's stock. Here's what you find: This year, Big Lake paid its stockholders an annual dividend of

$5.23

a share, but because of its high rate of growth in earnings, its dividends are expected to grow at the rate of

9%

a year for the next five years and then to level out at

6%

a year. So far, you've learned that the stock has a beta of

1.24,

the risk-free rate of return is

2.3%,

and the expected return on the market is

10.3%.

Using the CAPM to find the required rate of return, put a value on this stock.