Using the Gordon Model calculate United Health\'s cost of equity at the end of 2

Question

Using the Gordon Model calculate United Health's cost of equity at the end of 2016 for each growth rate scenario?

Calculate the 10 yr compund growth rate in dividends? Calculate the 5 yr compund growth rate in dividends?

Using the Gordon Model calculate United Health's cost of equity at the end of 2016 for each growth rate scenario?

F G United Health Group, Inc Year-end Dividend Growth Year per share rate 2006 2007 0.03 0.03 0.03 0.03 0.41 61.00 0.80 1.05 1.41 1.88 160.042.38 2010 2011 2012 2013 2014 2015 2016 Calculate the 10 yr compund growth rate in dividends? Calculate the 5 yr compund growth rate in dividends? Using the Gordon Model calculate United Health's cost of equity at the end of 2016 for each growth rate scenario? 10 12 13 Fill in the yellow cells with information found in Thomson Reuters' Eikon Make the calculations in the green cells. Show the formuals in the orange cells 15 Compound growth, 10 yr 16 Compound growth, 5 yr 18 Gordon model 19 P 20 Do 21 TE 22 10-yr. growth 160.04

Explanation / Answer

1) 10 year CAGR in dividends = (2.38/0.03)^(1/(10-1))-1 = 62.6%

2) 5 year CAGR in dividends = (2.38/0.80)^(1/(5-1))-1 = 12.9%

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