Question: Problem #3: Stock Valuation using a Dividend Discount Model Gillette Corporation is expected to grow its dividends and earnings at various rates. The company just

is expected to grow its dividends and earnings at various rates. The

Problem #3: Stock Valuation using a Dividend Discount Model Gillette Corporation is expected to grow its dividends and earnings at various rates. The company just paid a cash dividend of $1.35 per share. The company expects to grow its dividend at 6% for the next three years, then 8% for the following two years, after which the company expects to grow at a constant rate of 10% per year indefinitely. If the required rate of return on Gillette's common stock is 14%, then what is the Fair Market Value (FMV) of the stock now? Show a timeline of the cash flows. Show all work

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