Question
Assume Gillette Corporation will pay an annual dividend of $0.66 one year from now. Analysts expect this dividend to grow at 1 2 . 6
Assume Gillette Corporation will pay an annual dividend of $0.66one year from now. Analysts expect this dividend to grow at 12.6%per year thereafter until the 6th
year.Thereafter, growth will level off at 2.1%per year. According to thedividend-discount model, what is the value of a share of Gillette stock if thefirm's equity cost of capital is 7.8%?
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Management Science The Art Of Modeling With Spreadsheets
Authors: Stephen G. Powell, Kenneth R. Baker
3rd Edition
0470530677, 978-0470530672
