• Calculate the stock price for your selected company using the constant growth formula and the low-end dividend growth rate you determined in Part 1. Show all calculations for this estimated stock price using the low-end dividend growth rate.
  • For the required rate of return (r), use the following assumptions:
    • For a large capitalization company (greater than $10.0 billion in market capitalization) use 10.0%.
    • For a mid-cap company (between $2.0 billion and $10.0 billion in market capitalization) use 12.0%.
    • For a small-cap company (less than $2.0 billion in market capitalization) use 15.0%.
  • Show your calculations.
• In a similar manner, calculate another estimate of the stock price for your selected company using the constant growth formula and the high-end dividend growth rate.
  • Use the same assumptions for the required rate of return (r) that you used for the low-end stock price, other than using the high-end dividend growth rate.
  • Show your calculations.
• Compare each of the two stock prices you just calculated to the current stock price per share of the company.
  • State whether each constant growth stock price (low-end and high-end) is above or below the current price.
  • State whether each constant growth stock price (low-end and high-end) indicates if the stock price is currently under-valued or over-valued in the market.
• Determine your concluded stock value, based on the two calculations using the constant growth formula.

Year		2011		2012		2013		2014		2015		2016		2017	2018	2019	2020
Dividend Per Share		$0.94		$1.02		$1.12		$1.22		$1.32		$1.40		$1.48	$1.56	$1.60	$1.64
Annual Growth Rate		8.5%		9.8%		8.9%		8.2%		6.1%		5.7%		5.4%	2.6%	2.5%	-
Number of Years		10		5		3
Dividend Growth Average Per year		6%		4%		3%
Overall Dividend Growth		74%		17%		5%