Question content area top Part 1 Colgate-Palmolive Company has just paid an annual dividend of $1.08 . Analysts are predicting an 10.8% per year growth rate in earnings over the next five years. After that, Colgate's earnings are expected to grow at the current industry average of 4.8% per year. If Colgate's equity cost of capital is 7.8% per year and its dividend payout ratio remains constant, for what price does the DDM predict Colgate stock should sell?

You notice that Cocheco has a share price of $40.25 and EPS of $1.96. Its competitor Pelham Soda has EPS of $3.86. Jenson, a much smaller batch craft soda producer, has a P/E ratio of 33 . Based on this information, what is one estimate of the value of a share of Pelham Soda stock?