10. Now, using the Value Line sheet, estimate the average growth rate of dividends for MSFT over the last 10 years, from 2008-2018? Round your growth estimate to 4 decimal places. [Hint: The Growth rate (g) can be calculated as CPT i on your calculator or in Excel as a TVM problem. [For example: What is the rate of return if you invest $1 (div0) today and in 10 years it is worth $4 (div10)?] (5 points)

10 B: Two-stage Non-constant DDM: Now lets assume that for the next four years MSFT will grow its dividends at the growth rate you estimated in (10) above. Assuming D1 = $1.84, what are the dividends for: D2 ; D3 ; D4 ; and D5 if they grow at the rate estimated in (10) above? You may round each dividend estimate to the nearest penny. (10 points)

10 C:Now, lets assume that the dividend growth reverts back to a L-T sustainable growth rate = 6% after Year 5, that is from Year 6 to infinity. Estimate is D6 and P5. (5 points)

'106.08Tim25.9G 27 i)1.39 1.6% MICROSOFT ND Q-MSFT Microsoft finished fiscal 2018 with a We have made some adjustments to (Years end June our estimates for fiscal 2019. The posi- 30th) In keeping with the momentum gen- tive trends that are influencing Microsoft's erated in the last 12 to 18 months. reve business should remain in place, with rev. 0% 80% 11.0% , puting From a broader perspective, the continue investing in its cloud strategy. Cloud business tended to underscore the $122 billion for this year, though the 10% advanced 18% in the quarter over company the size of Microsoft. Meanwhile. 53%, and the associated gross margineon us to increne our earnings call by $0.25 a AN e uep Sogme BsPi.n tihe lateshat a bout Microsoft stock?, Ir the ed to c '106.08Tim25.9G 27 i)1.39 1.6% MICROSOFT ND Q-MSFT Microsoft finished fiscal 2018 with a We have made some adjustments to (Years end June our estimates for fiscal 2019. The posi- 30th) In keeping with the momentum gen- tive trends that are influencing Microsoft's erated in the last 12 to 18 months. reve business should remain in place, with rev. 0% 80% 11.0% , puting From a broader perspective, the continue investing in its cloud strategy. Cloud business tended to underscore the $122 billion for this year, though the 10% advanced 18% in the quarter over company the size of Microsoft. Meanwhile. 53%, and the associated gross margineon us to increne our earnings call by $0.25 a AN e uep Sogme BsPi.n tihe lateshat a bout Microsoft stock?, Ir the ed to c