Question: Estimating Stock Value Using Dividend Discount Model with Constant Perpetuity Kellogg pays $2.10 in annual per share dividends to its common stockholders, and its recent

 Estimating Stock Value Using Dividend Discount Model with Constant Perpetuity Kellogg

Estimating Stock Value Using Dividend Discount Model with Constant Perpetuity Kellogg pays $2.10 in annual per share dividends to its common stockholders, and its recent stock price was $82.50. Assume that Kellogg's cost of equity capital is 5.0%. a. Estimate Kellogg's stock price using the dividend discount model with constant perpetuity. $42 b. Compare the estimate obtained in part a with Kellogg's $82.50 price. What does the difference between these amounts imply about Kellogg's future growth

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