Pretend that today (t = 0) is Dec 31, 2018, the last day of 2018. Dividend for this year (D0) is already paid. The following table presents annual dividend per share paid by The Coca-Cola Company (KO) in last five years.

Year	Dividend
	Per Share
2018	1.56
2017	1.48
2016	1.4
2015	1.32
2014	1.22

Assume that the required rate of return on the stock (rs) is 10%.

1. The zero-growth model: Assume that the dividend of the company is expected to remain constant forever at $1.56, the last years dividend. Estimate the value of the stock today.

D1 = $1.56 (Same as D0 this time)

2. Constant growth model (Gordon model): Assume that dividends will grow at the same rate, call it g, they have grown in the last four years. Estimate the value of the stock today.

First, you will have to estimated growth rate (g) using the past dividends. You can use present value/future value concepts to do this.

3.Non-constant (variable) growth model: Assume that because of the new corporate tax cut, Coca-Cola Company can repatriate a lot of cash from foreign banks and will be able to pay more dividends for a few years. The firms financial manager expects that the dividends will increase at 12% annual rate, call it g1, for the next three years. At the end of three years (at the end of 2021), the company will go back to a constant rate, g2. Assume that g2 will be the same as g in part 2. Estimate the value of the stock today.

This means, D0 = $1.56, Non-constant growth (g1) = 12% for next three years, Constant growth(g2) = %, Required return on equity (r) = 10%

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