Question
1a.Dorpac Corporation has a dividend yield of 2.44%.Dorpac's equity cost of capital is 8.86%,and its dividends are expected to grow at a constant rate. a.
1a.Dorpac Corporation has a dividend yield of 2.44%.Dorpac's equity cost of capital is 8.86%,and its dividends are expected to grow at a constant rate. a. What is the expected growth rate of Dorpac's dividends? b. What is the expected growth rate of Dorpac's share price?
1b.Procter and Gamble (PG) paid an annual dividend of $2.83 in 2018. You expect PG to increase its dividends by 7.7% per year for the next five years (through 2023), and thereafter by 2.6% per year. If the appropriate equity cost of capital for Procter and Gamble is 7.8% per year, use the dividend-discount model to estimate its value per share at the end of 2018. The price per share is $_____?
1c.Colgate-Palmolive Company has just paid an annual dividend of $1.52. Analysts are predicting dividends to grow by $0.13 per year over the next five years. After then, Colgate's earnings are expected to grow 6.4% per year, and its dividend payout rate will remain constant. If Colgate's equity cost of capital is 8.4% per year, what price does the dividend-discount model predict Colgate stock should sell for today? The price per share is $____?
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