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Chapter 7 - Q7: Please answer the Finance question in the image below. Please note any decimal or rounding instructions! Thank you in advance! Assume
Chapter 7 - Q7: Please answer the Finance question in the image below. Please note any decimal or rounding instructions! Thank you in advance!
Assume Gillette Corporation will pay an annual dividend of $0.66 one year from now. Analysts expect this dividend to grow at 11.4% per year thereafter until the 4 th year. Thereafter, growth will level off a 1.8% 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 7.6% ? The value of Gillette's stock is ? (Round to the nearest cent.)
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