3. Perpetual Dividend Growth Model Go to finance.yahoo.com and find the following information: the beta, the most

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3. Perpetual Dividend Growth Model Go to finance.yahoo.com and find the following information:

the beta, the most recent annual dividend, and analysts’ estimated growth rate for Johnson &

Johnson (JNJ). Next, find the three-month Treasury bill yield on finance.yahoo.com. Assuming the market risk premium is 7 percent, what is the required return for JNJ? What is the value of JNJ stock using the perpetual dividend growth model? Does JNJ appear overpriced, underpriced, or correctly priced? Why might this analysis be inappropriate, or at least misleading?

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