Assume that the Temp Force has a beta of 1.2, the risk-free rate (the yield on Treasuries) is 7.0%, and the market risk premium is 5%.

(1) What is the required rate of return on the company's stock? and Assume that Temp Force is a constant growth company whose last dividend (D0, paid yesterday) was $2.00 and whose dividend is expected to grow indefinitely at a rate of 6%.

(2) What is the estimated current price of the company's intrinsic shares?

(3) What is the expected value of the stock in 1 year?

(4) What are the expected dividend yield, expected capital gains yield, and expected total return in the first year? Q. Now suppose the stock is currently selling for $30.29.

(5) What is your expected rate of return? A. Now assume that Temp Force's dividend is expected to experience non-constant growth of 30% from year 0 to year 1, 25% from year 1 to year 2, and 15% from year 2 to year 3. After year 3, dividends will grow at a constant rate of 6%.

(6) What is the intrinsic value of the stock under these conditions? What are the expected dividend yield and capital gains yield for the first year? What are the expected dividend yield and capital gains yield during the fourth year (year 3 through year 4)?