Reverse engineer Coca-Cola’s share price at the end of 2012 to solve for the implied expected…

Reverse engineer Coca-Cola’s share price at the end of 2012 to solve for the implied expected rate of return. First, assume that value equals price and that the earnings and 3% long-run growth forecasts through Year +6 and beyond are reliable proxies for the market’s expectations for Coca-Cola. Then solve for the implied expected rate of return (the discount rate) the market has impounded in Coca-Cola’s share price. (Hint: Begin with the forecast and valuation spreadsheet you developed to value Coca-Cola shares. Vary the discount rate until you solve for the discount rate that makes your value estimate exactly equal the end of 2012 market price of $35.48 per share.)