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Estimating Stock Value Using Dividend Discount Model with Constant Perpetuity Kellogg pays $1.80 in annual per share dividends to its common stockholders, and its recent
Estimating Stock Value Using Dividend Discount Model with Constant Perpetuity Kellogg pays $1.80 in annual per share dividends to its common stockholders, and its recent stock price was $82.50. Assume that Kellogg's cost of equity capital is 5.0%. a. Estimate Kellogg's stock price using the dividend discount model with constant perpetuity. b. Compare the estimate obtained in part a with Kellogg's $82.50 price. What does the difference between these amounts imply about Kellogg's future growth
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