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1Last years dividend was $1.58 per share. Suppose that this dividend is expected to increase by 4% per year, and that investors currently require an 7.5% per annum expected return to invest in the shares of banks with a similar risk to the Coca Cola Company. Use the dividend valuation model to value Coca Cola Company (KO) shares. (3 marks)
2Do the shares look undervalued or overvalued by the market, compared to your valuation? Explain your reasoning. Please write down the date on which you have completed your analysis, as the market value of the shares will change over time. (2 marks)