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Assume that Coca-Cola Company has a share price of $42.65. The firm will pay a dividend of $1.28 in one year, and you expect Coca-Cola
Assume that Coca-Cola Company has a share price of $42.65. The firm will pay a dividend of $1.28 in one year, and you expect Coca-Cola to raise this dividend by approximately 6.2% per year in perpetuity. a. If Coca-Cola's equity cost of capital is 8.2%, what share price would you expect based on your estimate of the dividend growth rate? b. Given Coca-Cola's share price, what would you conclude about your assessment of Coca-Cola's future dividend growth? a. If Coca-Cola's equity cost of capital is 8.2%, what share price would you expect based on your estimate of the dividend growth rate? Coca-Cola's price per share should be $ . (Round to the nearest cent.)
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