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Assume Gillette Corporation will pay an annual dividend of $0.69 one year from now. Analysts expect this dividend to grow at 11.2% per year thereafter
Assume Gillette Corporation will pay an annual dividend of $0.69 one year from now. Analysts expect this dividend to grow at 11.2% per year thereafter until the 5th year.Thereafter, growth will level off at 2.5% 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 8.2%?
The value ofGillette's stock is $ ?
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