Intro Bob's is a retail chain of hardware stores. The firm has 21,000 shares of stock outstanding that are currently valued at $63 a share. Firm's Beta is 1.2. The risk- frop rate is 1% and the market risk premium is 62%. Firm expects to pay an annual dividend of $3 in one year. Dividend is expected to grow indefinitely at 5% annually. The firm also has 500 coupon bonds outstanding that have a face value of 51,000, a market price of $1,168, mature in 6 years and have a YTM of 5.6596 The tax rate is 35% Part 1 Attempt 3/3 for 34 pts Assuming CAPM computes the right stock retum, then is firm's share priced correctly at $63 now? What is the correct stock price? thint plug the correct stock return computed by CAPM into DDM to find the correct price) 8721 Correct Part 2 Atmpt 1/3 for 10 pts What is the company's weighted average cost of capital CAPM is the riche method for cost of equity 4+ decimals Submit Part 3 Attempt 1/3 for 10 phi The firm is considering expanding by building a new superstom. The riska associated with the superstore are comparable to the risks of the firm's current operations. The suportare will require an initial investment of $12 mon and is expected to go to no cash in year 1 (F1) but to gece F2-F11 of 51.4 million annut over the need 10 years. The most be deprecated on a straight line banie over the life of the project. At the end of 11, the firm expects to tell the superstore for 107. What is the NPV superstore project 3-dome w 14