roblem #1: Required and the CAPM Model he common stock of Gillette Corporation has a beta of 0.75. Assume that the risk free nterest rate is 4% and the market's expected return is 12%. a.) Use the Capital Asset Pricing Model to calculate the required return for Gillete stock b.) Define beta. Problem #2: Stock Valuation using a Dividend Discount Model Gillette Corporation is expected to grow its dividends and earnings at various rates. The company just paid a cash dividend of S1.50 per share. The company expects to grow its dividend at 3% per year for each of the next two years, then 5% each year for each of the following two years after which the company expects to grow at a constant rate of 8% per year indefinitely a) Use the required return from the previous problem to calculate is the Fair Market Value (FMV) of the stock now. Show a timeline of the cash flows. Show all work b.) If the stock trades at $40.00 per share now, is the stock undervalued or overvalued