Step One: Go to Nasdags and pick a stock that has a symbol that starts with the first letter of your last name AND one that pays a dividend and has paid a dividend for the last 3 years (at least). Do not pick the same stock someone else has already used (check the prior post Step Two: Calculate the value of the stock using the dividend growth model. Price =DO (1+g)/i-g (Note One: You are solving for price. Do not put the current stock price in here Note Two: gand i should be converted from percentage to decimals. ie: 11.5% is.115) B (SHOW YOUR WORK ON THIS STEP). If, when you calculate the value, it doesn't work, don't despair. First, check your numbers. If your calculations are correct, keep in mind that this model won't work if the required return is less than the dividend growth rate. If that is the case, pick a different stock and try again. To calculate the value, remember that you'll be using Do. What you'll need to do is take the most recent quarterly dividend and multiply it by 4 (UNLESS you use an annualized number, in which case you'll use that and not multiply it by 4). That's your Do. For your required rate of return, you should use the average return of an index that your stock is included in, or could be included in (like the S&P 500 or DJIA). For the growth rate, you'll need to calculate this by using your calculator as follows: P/Y = 4 (because it's quarterly) N = Number of years from first dividend to current dividend. Remember to multiply this by 4 (because of 4 P/Y) I = THIS IS WHAT YOU'RE SOLVING FOR PV = This is the dividend in the past (at least 3 years ago). Watch out for anomalies, where maybe the stock split and the dividend changed substantially, and avoid that. This is entered as a negative number PMT=0 FV = This is what the most recent dividend was. This is entered as a positive. Step Three: Post the value you derived based on Step Two, the current market price per share of the stock, and the P:E Ratio. Step One: Go to Nasdags and pick a stock that has a symbol that starts with the first letter of your last name AND one that pays a dividend and has paid a dividend for the last 3 years (at least). Do not pick the same stock someone else has already used (check the prior post Step Two: Calculate the value of the stock using the dividend growth model. Price =DO (1+g)/i-g (Note One: You are solving for price. Do not put the current stock price in here Note Two: gand i should be converted from percentage to decimals. ie: 11.5% is.115) B (SHOW YOUR WORK ON THIS STEP). If, when you calculate the value, it doesn't work, don't despair. First, check your numbers. If your calculations are correct, keep in mind that this model won't work if the required return is less than the dividend growth rate. If that is the case, pick a different stock and try again. To calculate the value, remember that you'll be using Do. What you'll need to do is take the most recent quarterly dividend and multiply it by 4 (UNLESS you use an annualized number, in which case you'll use that and not multiply it by 4). That's your Do. For your required rate of return, you should use the average return of an index that your stock is included in, or could be included in (like the S&P 500 or DJIA). For the growth rate, you'll need to calculate this by using your calculator as follows: P/Y = 4 (because it's quarterly) N = Number of years from first dividend to current dividend. Remember to multiply this by 4 (because of 4 P/Y) I = THIS IS WHAT YOU'RE SOLVING FOR PV = This is the dividend in the past (at least 3 years ago). Watch out for anomalies, where maybe the stock split and the dividend changed substantially, and avoid that. This is entered as a negative number PMT=0 FV = This is what the most recent dividend was. This is entered as a positive. Step Three: Post the value you derived based on Step Two, the current market price per share of the stock, and the P:E Ratio