Company James Hardie Industries Plc (JHX)-Assume Rm-Rf=6%, beta=0.98, Rf=1.23%,

Fin YR= 2016 2017 2018 2019 2020

Dividend yield= 0.38 0.38 0.40 0.36 0.10

a)Calculate return as per CAPM model=r

calculate g- geometric growth rate in dividends for last 3 years

b)What is the price of company Po=D1/r-g

c)DPS is the total annual dividend per share paid for the financial year. Based on the previous 5-year pattern of DPS payments, estimate the intrinsic values using 1-stage models (the constant dividend growth model), and the 2-stage non-constant dividend growth model. Please use the 10-year Government bond yield as the Dividend growth rate in the equilibrium stage which is , Rf=1.23%, . You need to choose which model is the most appropriate one to use, and compare the intrinsic value versus the share price as of November 2020 (current price-39.20$). Would you recommend to buy or sell the shares in November 2020? = D₁/(1+R) + D₂(1+R)² + (D₃+P₃)/(1+R)³

^{Solve on excel and word}