Hello Accounting and Finance community! I am in need of assistance on an assignment of mine. Thank you in advance.

Text Message from BOB: Continuing expansion of the company requires that we determine the company's stock valuation under the new assumptions. I know you have a lot on your plate, but I need you to work with me on the projections for our com going forward. This year Fundamental Toys is on target for paying $1.24 per share in dividends. Next year the president and the Board expect to see a growth at 7%. The following year has a projected growth accelerate to r continue at 10% for another 3 years. Afer that it will fall back to the current 7% growth. To summarize: Year 1= 7%; Years 2, 3, going forward = 7%. You are not totally familiar with these calculations, but this is a good learning opportunity. Some guidelines have been provided 1. Please use the nonconstant growth model to calculate the expected price of the stock now. 2. Determine the one additional component X you need to use to figure this out in the nonconstant growth model. 3. Here is information that might help you determine X: our beta is about 1.32. If you decide to use the CAPM, please use the 3 Treasury bill rate from http://www.bloomberg.com/markets/rates/index.html With this information in hand, you can proceed as follows: First use CAPM to determine your factor X. Then start applying the nonconstant and constant growth models to determine your cash flows per period. Do not forget to calculate the horizon or terminal value of the company's stock. Discount the obtained cash values. Sum the discounted values up for the price of stock valuation. Deliverables The end result should be the calculated price of the company's stock. Support your answer by showing your calculations so I w you understand how to do this. Submit your analysis to my drop box by the date to be specified. k valuation under the new growth he projections for our company's stock ojected growth accelerate to reach 10% and marize: Year 1= 7%; Years 2, 3, 4 = 10%; then guidelines have been provided below. stant growth model. se the CAPM, please use the 3-month s per period. owing your calculations so I will know that Activity 1: Please keep in mind that the dividend given to you in the case is your Do. It is a multi-step process of using the model of non-constant growth for a stock price calculation. Step 1: Calculate the dividends in future years using the growth rates in the case from D1 to D5. Step 2: Using CAPM model you would need to develop the required rate of return on the stock. To do that, you need 3 components, of which the beta is given to you. Unless you want to calculate (or find on the internet) an average of the S & P 500 as a proxy for the Rm over a period, I'd say, at least 10 years, I would suggest we could use 8% as our market proxy. Or, you can use any other proxy, not the S &P, but please justify your choice of the index. The last element could be a proxy for the risk free rate. For example, a current 3 month T-bill yield. Once you have your required rate of return K, you can proceed to the next step: Step 3: calculate the terminal value of the cash flows afer year 4. Step 4: Discount appropriately all the dividends you have calculated as well as terminal value in period 4. The sum of those PVs w he Rm over a period, ny other proxy, not The sum of those PVs will be the price of the stock