Stock X is expected to pay a dividend of $5.40 annually in perpetuity. Stock X has a beta of 0.70, the riskfree rate is

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Stock X is expected to pay a dividend of $5.40 annually inperpetuity. Stock X has a beta of 0.70, the riskfree rate is 3.5%,and the market risk premium is 7.5%. 6 pts
a. Draw a graph of the SML. Label the axes.
b. Plot the following points on the graph, and include theirnumeric coordinates: the risk-free asset and stock X.
c. If the current observed price of X is $58.50, what returnwould we expect given the forecasted perpetual dividend? Plot thison the graph, and identify alpha of stock X on the graph, includingits numeric value