imac internet sharing - drops connection on ipad

Hello,

I have a new ipad and setup internet sharing on my imac. The connection appears strong - three bars - and works when first connecting. It then immediately drops the connection with "the server stopped responding message" although it still registers three bars.

I tried it with encryption and without in the imac. Same issue.

I reset network settings on the ipad and rebooted the ipad. Same issue.

The ipad has uninterrupted wifi on other networks so it appears to be the imac (Mac OS 10.7.5).

Help!

Merci!