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i need help on 5,6,7 (5) Assume the dividend growth rate is 5%, calculate the true value and annual rate of return using Gordon model.

i need help on 5,6,7
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(5) Assume the dividend growth rate is 5%, calculate the true value and annual rate of return using Gordon model. (6) Draw a security market line (SML) using the data above. Determine the intercept and slope of the SML (7) According to the CAPM model, will you buy Merck stock or not? Why? (35 points) . The following stock quotation for Merck reported on Wednesday, December 15, 2021 when market closed at 4:00 PM Eastern time Merck & Co., Inc. (MRK) NYSE 75.29+1.57 (+2.13%) At close: 04:04PM EST Previous Close 73.72 Market Cap 190.178B Open 73.71 Beta (5Y Monthly) 0.62 Bid 75.34 x 1800 PE Ratio (TTM) 26.57 Ask 75.45 x 1800 EPS (TTM) 2.83 Day's Range 73.71 - 75.39Earnings Date Feb 03, 2022 52 Week Range 68.44 - 91.40 Forward Dividend & Yield 2.76 (3.67%) Volume 14,142,043 Ex-Dividend Date Dec 14, 2021 Avg. Volume 16,958,188 1y Target Est 93.36 (1) What was December 15 close price of Merck stock? How did it change from previous day (December 14)? (2) If you purchased Merck stock at the 52 weeks low and sold it at close price on December 15, 2021. You have received dividend during this holding period. Calculate your holding period rate of return (3) Show how the 3.67% yield is calculated. (4) Currently, the 3-month T-bill interest rate is 1%, and required return on the stock market is 12.5%. Calculate required rate of return of Merck stock using the CAPM model. (5) Assume the dividend growth rate is 5%, calculate the true value and annual rate of return using Gordon model. (6) Draw a security market line (SML) using the data above. Determine the intercept and slope of the SML (7) According to the CAPM model, will you buy Merck stock or not? Why? (35 points)

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