Morphosis (Ltd) is a manufacturing company focusing on food production. The company recently paid a dividend of R2,50 per share and plans to increase its dividends by 10% in the first year, 15% in year 2, 20% in year 3 then level off at a constant rate of 5% thereafter. The T-bills are 6,50% and the return on the market is 25%. The standard deviations are 13 and 10 percent for Morphosis and the market respectively. The correlation coefficient between the two is 0,75 . a) Calculate the risk premium. What does this mean? b) Determine the required rate of return using CAPM c) Find the intrinsic value of the share using the DDM. d) Would you buy or sell this share? Why? e) Explain the difference between common and preference stock holders f) Suppose the country Morphosis operates in experiences a severe drought. What type of risk is this to the stockholders