Assume that:

The company attains steady growth stage on year 2025, which continues forever. The growth stage at this stage is 3%.

Dividend grows at the 5 year historical average dividend growth rate.

The risk-free rate on long-term T-bonds is about 3%.

Average historic return on S&P 500 was about 9%.

2. Collect necessary data (Dividend, Beta etc.) from the following websites:

http://www.nasdaq.com/quotes/

http://finance.yahoo.com/

3. Evaluate these four stocks: General Electronics (GE), Microsoft Corporation (MSFT), Nike (NKE) and Walmart (WMT).

4. Use the CAPM equation to calculate the Required Rate of Return (k) of the company:

k = Rf + * (Rm - Rf)

5. Then estimate price at the end of year 2020 (P2020) using Two Stage DDM:

6. Collect data for dividend and beta from NASDAQ, year-end S&P 500 price from Yahoo Finance.

7. Find the actual closing price of the stock at current time and denote it as Pact

1. What is the Required Rate of Returns (k) of the companies?