Eli Lilly (LLY): The following table contains historical dividends and free cash flows for the company.

Dividend Model: Calculate the growth in dividends and the average growth in dividends. Use this as your estimate of future dividend growth. Use 2019 dividend as D0. Use 8% as your stockholder rate of return (rs) estimate. Calculate the value of the stock.

FCF Model: Calculate the TVM growth rate. You will not use this number. Instead, use 3% as your g assumption. Use a discount rate of 6%. Use the average of all FCFs as your FCF0. The debt for this company is $17,224.2 and the number of shares is 906.6M. Find the value of one share of stock.

Calculate rs = (D1/P0) + g: The current stock price is $131.92. Use this stock price to calculate your expected rate of return using the dividend model assumptions.

CAPM Model: The stock beta is .19. Use beta to calculate the rate of return. Assume the risk free rate is 1% and the market risk premium (rm-rf) is 7%.

LLY	DIV	FCF
2015	2.00	2.975
2016	2.04	2.967
2017	2.08	2.260
2018	2.25	691
2019	2.58	5,120