In the text, we discussed using the discounted dividend model to estimate a stock’s intrinsic value. To keep things as simple as possible, let’s assume at first that XOM’s dividend is expected to grow at some constant rate over time. If so, the intrinsic value equals D1/(rs – g), where D1 is the expected annual dividend 1 year from now, rs is the stock’s required rate of return, and g is the dividend’s constant growth rate. To estimate the dividend growth rate, it’s helpful to look at XOM’s dividend history. Go back to the COMPANY OVERVIEW page. Select “FINANCIALS”; and under “FINANCIAL RATIOS,” select “WORLDSCOPE” and “ANNUAL INCOME STATEMENT RATIOS.” On your screen at the bottom of the Per Share Data section, you should see the firm’s annual dividend over the past several years. On the basis of this information, what has been the average annual dividend growth rate? Another way to obtain estimates of dividend growth rates is to look at analysts’ forecasts for future dividends, which can be found under “ESTIMATES” (on the left-hand side of your screen). Near the top of your screen, you should see an area marked “Consensus Estimates.” Use the scroll bar to change from EPS estimates to DPS estimates. What is the median year-end dividend forecast? You can use this as an estimate of D1 in your measure of intrinsic value. Also notice that the last line of this area shows the long-term growth rate. What is the median forecast of the company’s long-term growth rate? You can use this as a forecast of the firm’s dividend growth rate, g.