1. Suppose Coca-Cola stock trades at a forward price to earnings ratio of 28, its expected dividend payout ratio is 70 percent, and analysts believe that its dividend will grow at a constant rate of 4 percent per year. Calculate Coca-Cola’s required return.

2. Suppose Coca-Cola stock trades at a forward price to earnings ratio of 28, its expected dividend payout ratio is 70 percent, and analysts believe that its required return is 6.50 percent. Calculate Coca-Cola’s implied growth rate. 

3. A stock index is trading at a forward price to earnings ratio of 19. If the expected dividend payout ratio on the index is 60 percent, and equity investors expect an index rate of return of 8 percent, calculate the implied constant growth rate for the index. 

4. Suppose Coca-Cola stock trades at a forward price to earnings ratio of 28 and its expected dividend payout ratio is 70 percent. Analysts believe that Coca-Cola stock should earn a 9 percent return and that its dividends will grow by 4.50 percent per year indefinitely. Recommend a course of action for an investor interested in taking a position in Coca-Cola stock.