Write a paragraph on changes to the inputs that would allow your Constant Growth Model to provide a value consistent with the current stock price. What change in the dividend growth rate could be used to equate to the current stock price with the discount rate provided? Would a change in the discount rate, higher or lower, influence the valuation? How?

Write an explanation as to why the estimated stock price from your Constant Growth Model should or should not be relied upon given the inputs you used.

Is there a clear recommendation?

Write a compare and contrast of the Target Prices from your Stock Valuation Using Multiples to the current stock price.

Answers to the following below as well:

Would you invest in this stock? Why or why not?

Based on your valuations in the Research Project, would you characterize your stock as undervalued or overvalued? Explain.

The estimated value of a share of the stock using the Constant Growth Model is $26.54 Explanation: Given information: Current (or TTM) Dividend per share (D0) = $2.24 Constant growth rate (g) = 1.9% or 0.019 Required return (R) = 10.5% or 0.105 Step 1: First we compute the expected dividend next period (D1), that is given by: Expected dividend (D1) = D0 x (1+g) On putting values we get: Expected dividend (D1) = $2.24 x (1+ 0.019) Expected dividend (D1) = $2.24 x (1.019) Expected dividend (D1) = $2.2825 Step 2: The value of stock (P0) as per constant growth dividend discount model also known as (Gordon growth model) is given by: Value of Stock (P0) = D1 / (R - g) On putting values we get: Value of Stock (P0) = $2.2825 / (0.105 - 0.019) Value of Stock (P0) = $2.2825 / 0.086 Value of Stock (P0) = $26.541 So the estimated value of a share of the stock using the Constant Growth Model is $26.54 Explanation Please refer to solution in this step. 3 Answer The estimated value of a share of the stock using the Constant Growth Model is $26.54 Explanation: Given information: Current (or TTM) Dividend per share (D0) = $2.24 Constant growth rate (g) = 1.9% or 0.019 Required return (R) = 10.5% or 0.105 Step 1: First we compute the expected dividend next period (D1), that is given by: Expected dividend (D1) = D0 x (1+g) On putting values we get: Expected dividend (D1) = $2.24 x (1+ 0.019) Expected dividend (D1) = $2.24 x (1.019) Expected dividend (D1) = $2.2825 Step 2: The value of stock (P0) as per constant growth dividend discount model also known as (Gordon growth model) is given by: Value of Stock (P0) = D1 / (R - g) On putting values we get: Value of Stock (P0) = $2.2825 / (0.105 - 0.019) Value of Stock (P0) = $2.2825 / 0.086 Value of Stock (P0) = $26.541 So the estimated value of a share of the stock using the Constant Growth Model is $26.54