Jane Smart's firm requires all its analysts to use a two-stage dividend discount model (DDM) and the capital asset pricing model (CAPM) to value stocks. Using the CAPM and DDM, Smart has valued Alpha Company at $63 per share. She now must value Beta Corporation. a. Calculate the required rate of return for Beta by using the information in the following table: Alpha Beta Beta 1.35 1.15 Market Price $45.00 $30.00 Intrinsec Value 63 ? Risk-free Rate 4.50% Expected Market Return 14.50% b. Smith estimates the following EPS and dividend growth rates for Beta: First 3 years 12% per year Years thereafter 9% per year Estimate the intrinsic value of Beta by using the table above, and the two-stage DDM. Dividends per share in the most recent year were $1.72. c. Recommend Alpha or Beta stock for purchase by comparing each company's intrinsic value with its current market price. d. Describe one strength of the two-stage DDM in comparison with the constant-growth DDM. Describe one weakness inherent in all DDMs. Jane Smart's firm requires all its analysts to use a two-stage dividend discount model (DDM) and the capital asset pricing model (CAPM) to value stocks. Using the CAPM and DDM, Smart has valued Alpha Company at $63 per share. She now must value Beta Corporation. a. Calculate the required rate of return for Beta by using the information in the following table: Alpha Beta Beta 1.35 1.15 Market Price $45.00 $30.00 Intrinsec Value 63 ? Risk-free Rate 4.50% Expected Market Return 14.50% b. Smith estimates the following EPS and dividend growth rates for Beta: First 3 years 12% per year Years thereafter 9% per year Estimate the intrinsic value of Beta by using the table above, and the two-stage DDM. Dividends per share in the most recent year were $1.72. c. Recommend Alpha or Beta stock for purchase by comparing each company's intrinsic value with its current market price. d. Describe one strength of the two-stage DDM in comparison with the constant-growth DDM. Describe one weakness inherent in all DDMs