Question: Proctor and Gamble ( P&G ) is a well - known consumer products business. It is a mature company in a stable industry. Its current

Proctor and Gamble (P&G) is a well-known consumer products business. It is a mature company in a stable industry. Its current stock price is $149. The consensus estimate for growth of P&G is 5%. Last year, P&G paid a quarterly dividend of $0.8698 per share (i.e., it paid this amount each quarter during the year). P&Gs beta is 0.8, they have $31,988 million of debt and a market capitalization of $260,621 million. Their tax rate is 21%, the coupon rate on the debt is 7%, and the yield to maturity on the debt is 6%. The risk-free rate is 2%, and assume a market risk premium of 6.5%. What is P&Gs intrinsic value per share, based on the dividend growth model? Would you recommend investing in P&G? Why or why not?

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