Macrosoft (MS) is a computer software company.
Use the template below to calculate the requested values.
GREEN	Do not change these numbers
BLUE	For answers
Assumption Block:
MS is a Constant Growth Company
D0 =	$ 4.00
g =	6%
MS's Beta =	1.3
rRF =	3%
rM =	10%
1. Calculate the market risk premium (RPM), the risk premium for MS stock (RPMS), and MS's required rate of return
RPM	7%
RPMS	9.1%
rMS	12.1%
2. Calculate MS's expected dividend stream over the next 3 years
D1	D2	D3	D4
4.24	4.49	4.76	5.05
3. Calculate MS's intrinsic value as of time zero (P-hat0)
P-hat0
4. Calculate MS's intrinsic value as of year one (P-hat1)
P-hat1 =
5. Calculate MS's expected dividend yield in year 1
DY1 =
6. Calculate MS's expected capital gains yield in year 1
CGY1=
7. Calculate MS's expected total return in year 1
TR1=
8. Calculate MS's intrinsic value as of year three (P-hat3)
P-hat3 =