Mr. John is interested in investing in Ace Manufacturing Company (AMC) and has done some research. He finds that AMC's EPS in 2020 is $1.86. AMC does not have preferred stock outstanding. Its capital expenditure per share and depreciation per share in 2020 are $1.64 and $1.74, respectively. AMC has a working capital per share of $2.14 and $1.30 in 2019 and 2020, respectively. AMC is in steady state and its debt ratio has remained at 40%. Mr. John notices that the current 10-year T-note rate is 3.65% and a market risk premium of 4.80% is appropriate for the estimation of required return on stocks. AMC's beta value is 0.95. a. (5 points) Estimate Mr. John's required return (K) on AMC using the CAPM. b. (6 points) Calculate AMC's free cash flow to equity (FCFE) per share in 2020. c. (6 points) Assuming that AMC's FCFE will grow at a stable rate of 5% per year forever, estimate its fair value using the constant growth FCFE discount model. d. (3 points) If AMC's current market price is $65.50, should Mr. John consider buying the stock with a 15% margin of safety? Why