To determine the implied growth rate in dividends using a single-stage Dividend Discount Model (DDM) and compare it with rates implied from consensus analyst forecasts in Exhibit 8, we can use the following formula:

[P_0 = \frac{D_1}{r - g}]

Where: - (P_0) = Current share price ($44.48) - (D_1) = Expected dividend for the next period - (r) = Required rate of return - (g) = Implied growth rate in dividends

Rearranging the formula to solve for (g):

[g = \frac{D_1}{P_0} - r]

Given that the consensus forecast for earnings per share (EPS) is provided in Exhibit 8, we can use this to estimate the expected dividend per share for the next period. Dividends are generally a portion of earnings, so we can assume a payout ratio ((Payout\;Ratio)) and calculate the expected dividend ((D_1)):

[D_1 = Payout\;Ratio \times EPS]

Now, we need to estimate the required rate of return ((r)). Since it’s not provided in the information, we’ll use an appropriate discount rate based on the company’s risk and industry norms. For this analysis, let’s assume (r = 10\%).

Let’s go step by step and calculate the implied growth rate in dividends:

Step 1: Estimate (D_1) using the consensus EPS forecast and a hypothetical payout ratio.

Step 2: Calculate the implied growth rate ((g)) using the formula (g = \frac{D_1}{P_0} - r).

Step 3: Compare the calculated implied growth rate with the growth rates implied from consensus analyst forecasts in Exhibit 8.

Using the provided consensus forecast:

[EPS\;Forecast\;for\;July\;1,\;2019 = $3.18]

Assuming a conservative payout ratio of 40%:

[Payout\;Ratio = 0.40]

[D_1 = 0.40 \times $3.18 = $1.272]

Using the given discount rate:

[r = 0.10]

Now, calculate the implied growth rate ((g)):

[g = \frac{$1.272}{$44.48} - 0.10 = 0.0286]

Convert (g) to a percentage:

[g\;in\;% = 0.0286 \times 100 = 2.86\%]

So, the implied growth rate in dividends using the single-stage DDM and current share price is approximately 2.86%.

Now, let’s compare this with the growth rates implied from consensus analyst forecasts in Exhibit 8:

• Consensus Forecast for July 1, 2019: (g = \frac{$1.50}{$44.48} - 0.10 = 0.0275), or 2.75%
• Consensus Forecast for July 1, 2020: (g = \frac{$1.56}{$44.48} - 0.10 = 0.0278), or 2.78%

Comparing these growth rates:

• Implied Growth Rate from DDM: 2.86%
• Implied Growth Rate from Consensus Forecast (2019): 2.75%
• Implied Growth Rate from Consensus Forecast (2020): 2.78%

The growth rates implied by the DDM and the consensus analyst forecasts are relatively close, suggesting that the market’s valuation aligns well with the analysts’ expectations. It’s important to note that the DDM’s implied growth rate is based on the specific assumptions made for payout ratio and required rate of return, which can vary based on the investor’s perspective.