Abbott Laboratories (ABT) engages in the discovery, development, manufacture, and sale of a line of health care and pharmaceutical products. Below you will find selected information from Value Line. Use the Value Line estimated 2012 figures as the actual year-end figures for the company. The beta reported was .9 and the risk-free rate was 5.93 percent. Assume a market risk premium of 5 percent.

1.

What is the sustainable growth rate and required return for Abbott Laboratories?

2.	Using these values, calculate the 2013 share price of Abbott Laboratories stock according to the constant dividend growth model.

2008 2009 2010 2011 2012 2013 ALUEONEPU 33.05 1940 19.82 22.73 24.74 2565 21.05 Sales per sh 4.32 5.09 5.90 661 660 7.30 Cash Flow" per sh 3.03 3.72 4.17 466 500 5.35 Earnings per sh A 1.44 1.60 1.T6 1.88 204 216 Div'ds Decl'd per sh BN 2.40 75 Capl Spending persh .90 22.25 11.48 14.73 14.47 1556 17.05 1825 Book Value per sh C 183 130 12.2 12.2 Bold tigres are Avg AnnTPERatio 150 1.10 87 .78 .79 value Line Relative PE Ratio atea Awg Ann' Div'd Yield 2.6% 33% 35% 35% 29628 30765 35167 38851 40250 42850 Sales (smill 51200 25.5% 288% 30.3% 31.2% 31.8% 31.5% Operating Margin 31.0% 3150 18388 20893 2624.3 3043 3100 3050 Depreciation FSmil) 47342 58052 6501.1 7331.0 7880 8350 Net Profit ($mil) 10050 19.2% 170% 50% 15.0% 15.5% 16.0% Income Tax Rate 17.0% 16 18.9% 85% 18.0% 19.6% 19.5% Net Profit Margin 19.6% 54507 0264 5055.1 8288.5 7800 7900 Working Capi (Smil) 9500 87133 11266 12524 12010 11500 10800 Long-Term Debt (Smill 9000 17480 22850 22388 24440 26750 28500 Sh Equity $mill 34500 18.8% 75% 9.1% 20.5 19.0% 19,5% Return on Total Cap 23.0% 27.1% 254% 29.0% 30.0% 29.5% 29.5% Retu rn on Shr. 29.0% 14.6% 14.8% 1 1% 18.0% 17.5% 18.0% Retained to Com Eq 180 46% 42% 41% 40% 40% 38% All Divds to Net Prof 37%