In: Finance
Assume Gillette Corporation will pay an annual dividend of
$0.61
one year from now. Analysts expect this dividend to grow at
12.8%
per year thereafter until the
6th
year. Thereafter, growth will level off at
1.7%
per year. According to the dividend-discount model, what is the value of a share of Gillette stock if the firm's equity cost of capital is
8.1%?
Calculations-
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