H.J. Heinz’s annual dividends were as follows:

1990 ..............$0.540

1991.............. 0.620

1992 .............. 0.700

1993.............. 0.780

1994 .............. 0.860

1995 .............. 0.940

1996 .............. 1.035

1997 .............. 1.135

1998 .............. 1.235

1999 .............. 1.344

2000 .............. 1.447

Use these payments to determine the historical growth rate of the dividend. Calculate growth rates based on

(1) The average percentage change

(2) Beginning and terminal values.

(3) Regression analysis.

Find the current yield on the six-month Treasury bill and Heinz’s beta and most recent annual dividend. Assume that the return on the market is 5 to 7 percent higher than the Treasury bill rate. Develop a range of stock valuations based on this information. If your valuation differs from the current market price of the stock, what are some possible explanations for the divergence?