Dividend_paying_company_CAPM 26 Apr 2011

Pick a company that pays dividends, then calculate the expected growth rate of your company using the CAPM. Once this task is complete, calculate the expected growth rate using the Constant Growth (or Gordon Growth) Model. You may need additional information to complete this exercise. You can find a stock's beta and growth rate at http://quote.yahoo.com/. Once there, enter the ticker for the company in question. Then, click on "Key Statistics" about halfway down the left hand side of the page. You can find the beta here. Alternatively, you can go to http://www.reuters.com/.Click on News & Markets, the Stocks (Under Markets). Enter the ticker symbol for the company in question. Click on "Ratios" about halfway down the left hand side of the page.

Company
Symbol
Risk Free rate (RF)
Market Risk Premium (MRP)
Beta (b)
Dividend (D)
Stock Price (P)
 

SML formula
Required rate of return (R)
Constant Growth formula
Growth rate (g)