Assume Gillette Corporation will pay an annual dividend of $0.66 one year from now. Analysts expect this

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Assume Gillette Corporation will pay an annual dividend of $0.66 one year from now.

Analysts expect this dividend to grow at 11.9% per year thereafter until the fifth year.

After then, growth will level off at 1.5% 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 7.6%?

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Fundamentals Of Corporate Finance

ISBN: 9781292437156

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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Question Posted: Feb 27, 2024 03:07 AM

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Assume Gillette Corporation will pay an annual dividend of $0.66 one year from now. Analysts expect this

Question:

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To calculate the value of a share of Gillette stock using the dividenddiscount model we need to calc...View the full answer

Fundamentals Of Corporate Finance

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