PART A ONLY

InterContinental Hotels Group operates 18 hotel brands across the midscale through luxury segments. They include: Holiday Inn, Hotel Indigo, Avid, Klimpton, and others. The dividend yield trailing twelve months is 0.784%, and it's current market price per share is USD $50.89. InterContinental Hotels Group's year to date return is -25.89%. DATE 2019 DEC 2018 DEC 2017 DEC 2016 DEC 2015 DEC 2014 DEC PRICE PER SHARE (USD DIVIDEND PER SHARE $) (USD $) 68.87 1.18 56.82 1.1295 67.17 1.0292 50.24 1.0884 50.65 1.0488 53.08 0.9735 Part a. Calculate according to the Constant Growth Model, InterContinental's growth rate using the provided historical data. Part b. Suppose IHG is expected to grow at the rate calculated in Part a. for 3 more years, and thereafter, grow at a rate of 5% for the foreseeable future. What is the current value of IHG common stock to an investor who is able to earn 5.8% from investments with a similar level of risk? The beta of IHG is 0.92