EXCEL ONLY

PROBLEM 4 Given the following information; calculate the price of the common stock using the constant growth in dividends model. Risk-free rate (RA) = 3.0%; Market Rate of Return (Rm) =10.5% Beta of the Stock = 1.2 Dividends just paid (D) = $4.00/per share Constant dividend growth rate = 6% per year [Hint: First calculate the required rate of return for the stock using CAPM. Use this to calculate the price of the stock using the constant growth in dividends model]