IBM has paid a dividend for many years and currently has a dividend yield around 5%. You would like to calculate the intrinsic value of the stock and decide to use the dividend growth model. IBM currently pays a dividend of $6.60 (this is the current dividend, Do). Q1. Calculate the required retum using the CAPM. Assume a risk-free rate of 4% and an expected market return of 10%. To find IBM's beta, use the posted Excel file (IBMcase,data) in which I have downloaded monthly prices for the past 5 years and calculated monthly returns for IBM and SPY (which approximates the market). Q2. If you study historical prices in Yahoo finance, you can see that IBM's dividend has roughly doubled in the past 10 years. Thus, a simple rule-of-72 calculation shows the dividend growth rate has been about 7%, on average, for the past 10 years. Similarly, analysts' forward 5 -year growth forecast is about 7% per year. So, you make the assumption that IBM's dividend will have constant growth of 7%. Calculate the intrinsic value per share. Q3: You revise your estimate of growth because you realize that IBM's dividend has grown by only about 3% per year over the past 5 years, despite the faster earlier growth. So, you decide to use 3% as a constant growth rate. Calculate the intrinsic value per share. Q4: You revise your estimate of growth again because you take account of analyst growth estimates of 7% and apply this rate for the next 3 years, then after that you apply a constant rate of 3%. Note: Write down your equations with numbers to show your work