Problem 2: You are asked to evaluate the common stock of Bumble Bee Seafood (ticker symbol: BEE) using the constant dividend growth model and the CAPM. The stock is currently priced (Po) at $44.20 per share. Next year, EPS is estimated to be $3.24, and BEE is expected to pay dividends totaling $1.80 per share next year. Your best estimate for the long term constant growth rate in Bumble Bee earnings per share and dividends is 2.0%. The equity beta for BEE is 0.72, the expected long-term return on the Market Portfolio is 7.0%, and the expected return on risk-free securities is 1.50%. (12 points) SHOW ALL OF YOUR WORK BELOW a) What is the required rate of return on BB stock according to the CAPM? b) Use the required return estimate in (b), and compute the present value of one share of BEE stock using the constant growth model. c) What is the expected rate of return on BEE stock according to the dividend growth model (using the current stock price as Po)? d) Is BEE currently over-valued or undervalued? Explain in a complete sentence