1. As I explained in the class, download interest rates , stock prices, and dividend for 5 firms. The data should be monthly adjusted prices and dividends for the period from January 1990 to August 2020. 2. Use the dividend growth model to calculate the required rate of return (the cost of equity). I First, calculate the growth rate of dividend (g) as I explained in the class. Second, you predict next period dividend using the forecast function. 3. Compute the variance for each single stock and the covariance of each stock with the market. Compute Beta and Jensen's Alpha for each stock. 4. Mention whether the stock is over- or undervalued. 5. Use CAPM to compute the required rate of return (Cost of Equity). 6. Assume that the YTM is 7%. Compute the WACC for each firm assuming Debt to Asset Ratio of 70%. 7. Use the last balance sheet to calculate (g) and recalculate WACC. Assume Instructions: 1. You submit a soft copy of your work. In the left corner of the first page the full name of students and their number must appear clearly with a font of 16. 2. Results must also be clear in a highlighted table. 3. You can work as a group of four. Only the lead student will submit. Please avoid multiple submissions. 4. The assignment is due on Wednesday 7/10/2020. I will deduct points if point 1 and 2 are not satisfied. 1. As I explained in the class, download interest rates , stock prices, and dividend for 5 firms. The data should be monthly adjusted prices and dividends for the period from January 1990 to August 2020. 2. Use the dividend growth model to calculate the required rate of return (the cost of equity). I First, calculate the growth rate of dividend (g) as I explained in the class. Second, you predict next period dividend using the forecast function. 3. Compute the variance for each single stock and the covariance of each stock with the market. Compute Beta and Jensen's Alpha for each stock. 4. Mention whether the stock is over- or undervalued. 5. Use CAPM to compute the required rate of return (Cost of Equity). 6. Assume that the YTM is 7%. Compute the WACC for each firm assuming Debt to Asset Ratio of 70%. 7. Use the last balance sheet to calculate (g) and recalculate WACC. Assume Instructions: 1. You submit a soft copy of your work. In the left corner of the first page the full name of students and their number must appear clearly with a font of 16. 2. Results must also be clear in a highlighted table. 3. You can work as a group of four. Only the lead student will submit. Please avoid multiple submissions. 4. The assignment is due on Wednesday 7/10/2020. I will deduct points if point 1 and 2 are not satisfied