Step 1: choose 2 companies whose stocks are listed amont the 30 dow ones industr

Question

Step 1: choose 2 companies whose stocks are listed amont the 30 dow ones industrials. (**will be using Coca Cola & McDonald's Corp)

step 2: use the non-constant growth example as a simplified model of DCF analysis and the informaiton provided in your Valueline reports to estimate future dividends.

Step 3: Using the CAPM (Capital Asset Pricing Model) find the appropriate risk-adjusted discount rate for your stocks. The three variables needed to calculate r are the following:

Rf: 4.5%

Rm: 12.5%

Beta is found on your Vauline Report

Step 4: Now return to step 2 to calculate the discounted present value of yoru company's common dividends.

Step 5: compare the present value you calculated with the recent price shown at the top of your Valuline report. To the extent these two prices differ significantly, briefly discuss how you might adjust either your estimate for R or your estimate for g to bring your present value closer to the recent price.

Step 6: Given the above analysis, what is your decision on making a profitable trade in common stock of this compnay? Buy or sell or No Trade?

Step 7: Which of the two valuations do you have the most confidence in? Briefly explain why.

****Please show all work and provide explanation so that I can try and understand better.

Explanation / Answer

Could you please give the value of Beta

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