Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Using 3 methods (dividend yield + growth rate, CAPM and bond yield + premium), calculate the cost of equity for Colgate-Palmolive corp. The current dividend

image text in transcribed
Using 3 methods (dividend yield + growth rate, CAPM and bond yield + premium), calculate the cost of equity for Colgate-Palmolive corp. The current dividend (Do) is $1.71 and dividends are expected to grow by 4% per year. The stock is currently selling for $85.48. The beta is 56, risk free rate is 1% and the market risk premium is 8%. Their bonds are yielding about 2.34%

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

Essentials Of Health Care Finance

Authors: William O. Cleverley

3rd Edition

0834203413, 978-0834203419

More Books

Students also viewed these Finance questions

Question

25.0 m C B A 52.0 m 65.0 m

Answered: 1 week ago

Question

Give details of the use of ICT in workforce planning

Answered: 1 week ago

Question

Explain the various meanings of and approaches to flexible working

Answered: 1 week ago