Websites for bond information:
FINRA Bond Market Data
www.finra.org/marketdata
Yahoo Finance:
http://finance.yahoo.com/bonds
Q3. The third step is to estimate a second stage (also called the stable stage) growth rate in dividends, g2, for use in the Two-Stage DDM. Your estimate for g2 should not be greater than the expected future growth in the overall economy (expected growth in GDP). Why? LIST your estimate for g2 and EXPLAIN your reasoning.
Q4. LIST KO’s current dividend (dividend just paid) and use this value as D(0) in the Two-Stage DDM.
Q5. SHOW your calculations and LIST your value (price per share) estimate for KO using the Two-Stage DDM.
Q6. Perform Sensitivity Analysis (SA) on your estimated price per share in by varying both your expected growth rates and discount rates by +/- 2.0 percent in .5 percent increments while holding one of the two parameters (growth or discount rate) constant. DISCUSS your results. That is, describe in words how your value estimates change as you change your growth and discount rate estimates.
