i need help doing step 3 (last photo)

Step 1: Calculate required rate of return (j) for the common stock using Capital Asset Pricing Model (CAPM) [CAPM formula is tj= RF+ (rm-RF3B (1) The company's beta Bj can be obtained from the Value Line Investment Survey (which is available at CSULA library database or http://finance yahoo.com Coca Cola Beta B=0.90 Calculate required risk of return (rr) Use capital asset pricing model (CAPM) =Rf+(rm-RE)-B Beta 0.90 RI= 3 month t bill = 0.055% Required risk of return 11 9% for large cap (coca cola) 16.2% for small cap (2) 3-month Treasury Bitrate (RF) can be obtained from the Wall Street Journal RF = 0.055% (3) required market return (rm) is from the Ibbotson Stock Bonds Bills and Inflation (SBBI) 2019 Yearbook (which is 11 9 % for large cap stock, and 16.2% for small cap stock, as shown in Table 1 on page 3) recoca cola)=Rf + (rm-RI) b R (coca cola) = 0.055% + (11 9% -0.055%) 0.90 R (coca cola) = 10.7155% = Step 2: Deltrmine the true value of the common stock using Gordon Dividend Valuation Model as the following instruction (1) Obtain dividend per share in the past few years from the Value Line Investment Survey (2) Estimate annual growth rate of future dididend per share (C) (3) Estimate expected dividend per share for next year (0) (4) Calculate true value using the Gordon Model The formula is True value of common stock - De{1+2) - D 19 19 where is calculated from CAPM in Step 1 D.168 D=1.75 ra10.72% 94.46% Dividend in past 5 Years 2016: 1.40 2017: 1.48 2018 1.56 2019 160 2020.1.64 2021: 168 Dividend Growth Rate Y 2016 to Yt 2017.(1.48-1.4071.40571% Dividend Growth Rate Yr 2017 to Y 2018 (156-1 4871.435 415 Dividend Growth Rate Y 2018 to Y2019. (1.60-1.561 56524% Dividend Growth Rate Y 2019 to 2020: (164-1601 602 50% Dividend Growth Rate Y 2020 to Y2021: 163-1647164-2.44% Avg Dividend Growth Ratepast Syrsyg= (5.71% 5.41%+6 24%2.50%+2.44% 22.355 -4.46% D. (1+) D True Value - 1.68(1144612 10.7294596 1.68(1+0.0446) 6.2696 1.75 0.0626 =$27.95 $28 Step 3: Obtain the current market price (P) of the company stock from the Wall Street Journal or internet, and determine whether you will purchase it based on the following three valuation methods Method 1 Compare market price with the true value calculated from Step 2 Method 2: Compare required rate of return (calculated from CAPM in Step 1) with Annual Rate of Return (which is calculated as Annual rate of return D. (1+g) + g = _D1 +9 P Method 3. P/E multiples approach Calculate forecasted market price next year by forecasted market price next year = Forecasted EPS next year industry average P/E ratio Forecasted EPS next year can be obtained from http://finance.yahoo.com or the Value Line Investment Survey Industry average P/E ratio can be obtained from https://www.gurufocus.com/sector_shiller_pe php http://www.macrotrends net/stocks, FACTIVA, www.reuters.com, or your first group project Step 1: Calculate required rate of return (j) for the common stock using Capital Asset Pricing Model (CAPM) [CAPM formula is tj= RF+ (rm-RF3B (1) The company's beta Bj can be obtained from the Value Line Investment Survey (which is available at CSULA library database or http://finance yahoo.com Coca Cola Beta B=0.90 Calculate required risk of return (rr) Use capital asset pricing model (CAPM) =Rf+(rm-RE)-B Beta 0.90 RI= 3 month t bill = 0.055% Required risk of return 11 9% for large cap (coca cola) 16.2% for small cap (2) 3-month Treasury Bitrate (RF) can be obtained from the Wall Street Journal RF = 0.055% (3) required market return (rm) is from the Ibbotson Stock Bonds Bills and Inflation (SBBI) 2019 Yearbook (which is 11 9 % for large cap stock, and 16.2% for small cap stock, as shown in Table 1 on page 3) recoca cola)=Rf + (rm-RI) b R (coca cola) = 0.055% + (11 9% -0.055%) 0.90 R (coca cola) = 10.7155% = Step 2: Deltrmine the true value of the common stock using Gordon Dividend Valuation Model as the following instruction (1) Obtain dividend per share in the past few years from the Value Line Investment Survey (2) Estimate annual growth rate of future dididend per share (C) (3) Estimate expected dividend per share for next year (0) (4) Calculate true value using the Gordon Model The formula is True value of common stock - De{1+2) - D 19 19 where is calculated from CAPM in Step 1 D.168 D=1.75 ra10.72% 94.46% Dividend in past 5 Years 2016: 1.40 2017: 1.48 2018 1.56 2019 160 2020.1.64 2021: 168 Dividend Growth Rate Y 2016 to Yt 2017.(1.48-1.4071.40571% Dividend Growth Rate Yr 2017 to Y 2018 (156-1 4871.435 415 Dividend Growth Rate Y 2018 to Y2019. (1.60-1.561 56524% Dividend Growth Rate Y 2019 to 2020: (164-1601 602 50% Dividend Growth Rate Y 2020 to Y2021: 163-1647164-2.44% Avg Dividend Growth Ratepast Syrsyg= (5.71% 5.41%+6 24%2.50%+2.44% 22.355 -4.46% D. (1+) D True Value - 1.68(1144612 10.7294596 1.68(1+0.0446) 6.2696 1.75 0.0626 =$27.95 $28 Step 3: Obtain the current market price (P) of the company stock from the Wall Street Journal or internet, and determine whether you will purchase it based on the following three valuation methods Method 1 Compare market price with the true value calculated from Step 2 Method 2: Compare required rate of return (calculated from CAPM in Step 1) with Annual Rate of Return (which is calculated as Annual rate of return D. (1+g) + g = _D1 +9 P Method 3. P/E multiples approach Calculate forecasted market price next year by forecasted market price next year = Forecasted EPS next year industry average P/E ratio Forecasted EPS next year can be obtained from http://finance.yahoo.com or the Value Line Investment Survey Industry average P/E ratio can be obtained from https://www.gurufocus.com/sector_shiller_pe php http://www.macrotrends net/stocks, FACTIVA, www.reuters.com, or your first group project