Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Colgate-Palmolive Company has just paid an annual dividend of $1.81. Analysts are predicting dividends to grow by $0.19 per year over the next five years.

image text in transcribed

Colgate-Palmolive Company has just paid an annual dividend of $1.81. Analysts are predicting dividends to grow by $0.19 per year over the next five years. After then, Colgate's earnings are expected to grow 6.7% per year, and its dividend payout rate will remain constant. If Colgate's equity cost of capital is 7.1% per year, what price does the dividend-discount model predict Colgate stock should sell for today? The price per share is $812.45. (Round to two decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Industrializing Financial Services With DevOps

Authors: Spyridon Maniotis

1st Edition

1804614343, 978-1804614341

More Books

Students also viewed these Finance questions

Question

55. For any events A and B with P(B) 0, show that

Answered: 1 week ago