Question
Assume Gillette Corporation will pay an annual dividend of$0.62one year from now. Analysts expect this dividend to grow at11.5%per year thereafter until the6th year. Thereafter,
Assume Gillette Corporation will pay an annual dividend of$0.62one year from now. Analysts expect this dividend to grow at11.5%per year thereafter until the6th
year. Thereafter, growth will level off at1.6%per year. According to the dividend-discount model, what is the value of a share of Gillette stock if the firm's equity cost of capital is
8.4%?
The value of Gillette's stock is $____
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Fundamentals of Multinational Finance
Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman
5th edition
205989756, 978-0205989751
