General Mills (GIS)

Estimate cost of debt and dividend growth rate for firm you are studying.

Estimate cost of debt using financial information

Debt rating from S&P & average interest rate for firms with this rating

Historical dividend growth calculation

Analysts forecasted growth for earnings, sales and other variables

Your own growth rate estimate

Estimate of Rd with historical numbers In your Excel file you need to get the following items from your BS/IS data Interest expense Short/Current LT debt Long Term debt With this information you can calculate some estimates of the average interest rate (LT debt only or total debt, you can use end of period level or average debt in the period) Since the ST rates are currently very low, it is reasonable to exclude ST debt from your estimate. Please specify the formula you used to estimate the interest rate.