Question 4 5 pts Assume (for ease of calculations) that Merck pays its dividend annually. It just paid its annual dividend of 2.28 and announced plans to grow that dividend by 2.13% for next year. This annual growth rate is expected to persist forever. Your discount rate (required return) to be willing to buy Merck stock is 8.69%. What price should you be willing to pay today for a share of Merck stock? Answer should include two digits to the right of the decimal point (i.e. it includes cents, but not fractions of cents). Question 5 5 pts You estimate that Mobil Pro Corp will start paying dividends five (5) years from today. At that time you estimate the dividend will be 1.7 (i.e. D5 = 1.7). You also expect the dividends to grow at a rate of 11.1% for the following 7 years (from t=6 to 12 inclusive). After that high growth period ends, the growth rate will fall to 6.0% and remain at 6.0% forever. What is your estimate of Mobil Pro Corp's stock price today if your required rate of return is 9.8%? Answer should include two digits to the right of the decimal point (i.e. it includes cents, but not fractions of cents). Question 6 5 pts Suppose the market risk premium is 5.9% and also that the standard deviation of returns on the market portfolio is 0.27. Further assume that the correlation between the returns on ABC (Google) stock and returns on the market portfolio is 0.8, while the standard deviation of returns on ABC stock is 0.62. Finally assume that the risk-free rate is 2%. Under the CAPM, what is the expected (i.e. required) return on ABC stock? Answer should include four digits to the right of the decimal point