What are the ways to estimate the cost of common stock (i.e. or the required return on common stock)? We can use the dividend growth model formula P=D/(r-g) to estimate the cost of common stock (r). We know PepsiCo's actual closing stock price on 12/31/2013. For g, we can use the number that we will find in question #5. For D, again we can use the growth number that we will find in #5. Estimate the value of PepsiCo shares using the following models: The zero-growth model The constant-growth model The supernormal growth model Based on each model, what would be our investment advice for potential investors in PepsiCo shares?