Calculate a stock price using its past dividends as an indicator of future dividend growth rate. You will determine the stocks required rate of return (CAPM) and future expected dividend growth rate. You will use the Dividend Growth Model to calculate a current theoretical value of the stock price for Asset J. Complete problems 1 through 8 and answer questions in an essay format when required. You will need to use the answers in question 1 and 2 to answer question 3. The equation for CAPM is k = R + [b x (R R )] k = Let: The equation for calculating the growth rate of dividends is the future value equation. where: Calculate the growth rate: where: Let: The equation for calculating the growth rate of dividends is the future value equation. where:
