Coca-Cola Company (KO) paid a common dividend of $1.48 in 2017. The cost of equity is...

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Coca-Cola Company (KO) paid a common dividend of $1.48 in 2017.The cost of equity is 3.0%, market return is 6%, and a 10-yearTreasury note rate is 2%. You decided to value KO’s stock todetermine whether it is under-valued. You gathered the followinginformation:
The before-tax cost of debt is 6 percent.
The company’s target capital structure is financed 25 percentdebt, 25 percent preferred stock, and 50 percent common stock.
The cost of preferred stock is 4 percent.
Common dividend is expected to grow at 5 percent in 2018, 2019,and 2020. It will grow at 3 percent in 2021, and then stabilizes ata long-term growth rate of 2%.
Corporate tax rate is 25%
What is the expected KO’s market price per share at the end of2021?
About $171
About $177
About $180
About $109.38

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Coca-Cola Company (KO) paid a common dividend of $1.48 in 2017.The cost of equity is 3.0%, market return is 6%, and a 10-yearTreasury note rate is 2%. You decided to value KO’s stock todetermine whether it is under-valued. You gathered the followinginformation:The before-tax cost of debt is 6 percent.The company’s target capital structure is financed 25 percentdebt, 25 percent preferred stock, and 50 percent common stock.The cost of preferred stock is 4 percent.Common dividend is expected to grow at 5 percent in 2018, 2019,and 2020. It will grow at 3 percent in 2021, and then stabilizes ata long-term growth rate of 2%.Corporate tax rate is 25%What is the expected KO’s market price per share at the end of2021?About $171About $177About $180About $109.38