JenniferJohnson296_Unit_6_DS_Assignment - Caclualte the...

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Unit 6 DS MT 217 Corporation - Solution 1. Pick a company that pays dividends, then calculate the expected growth rate of you Based on the assumptions that: Risk Free Rate = 4.00% Rf Market Return = 12.00% Rm We found the Beta of MT 217 Corp = 0.80 SO CAPM = Rf + Beta(RM - Rf) 10.4% Answer Part 1 of DS Assignment is use the CAPM to find the Required Rate of Return on MT 2 This will be the "r" value that is used in the CGM. 2. Once this task is complete, calculate the expected growth rate using the Constant G
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Unformatted text preview: Caclualte the Dividend Growth Rate of MT 217 for Constant Growth Model (CGM) We use actuall MT 217 history PV ($1.29) Dividend paid in 2002 Negative so Excel can do the math FV $1.63 Dividend Paid in 2008 n 6 PMT Rate 3.98% This will be the Dividend Growth Rate … = g Constant Growth Model Part 2 of DS Assignment is use the the CGM to determine a value for the stock of MT 1 D P r g =-ur company using the CAPM. 217 Corp. Growth (or Gordon Growth) Model. 217 Corp....
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This note was uploaded on 04/19/2011 for the course MT 217 taught by Professor Finance during the Spring '11 term at Kaplan University.

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JenniferJohnson296_Unit_6_DS_Assignment - Caclualte the...

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