Use the Dividend Growth model to calculate a valuation for Starbucks stock.

1. Assume the dividend will grow at the average rate of change in your projected Net Income over the next three years. 2. Assume the required return is 3% higher than the dividend growth rate. Thus, if the calculated growth rate of Net Income over the next three years is 6.2%, then assume a required return of 9.2% 3. Compare your calculated valuation to the Companys current stock price, and comment on any significant variation. 4. Using your assumed dividend growth rate, what is the required return based on the Companys current stock price.