CAPM k=r;+B[E(ru) r,] No Growth Model: V: = = D k Constant Growth Model: D Vo = g= perpetual growth rate in dividends k-g Please provide details of your calculation when applicable in order to earn partial credits. Q1 Utility Co. will pay a year-end dividend of $4, and dividend thereafter is expected to stay at the same level per year. The expected return on the stock (market capitalization rate) is 10%. What is the value of the stock? Q2 Miltimar Co. will pay a year-end dividend of $4, and dividend thereafter is expected to grow at the constant rate of 4% per year. The risk-free rate is 4%, and the expected return on the market portfolio is 12%. The stock has a beta of 0.75. What is the value of the stock