Assume Gillette Corporation will pay an annual dividend of $ 0.64 one year from now. Analysts expect this dividend to grow at 11.3 % per year thereafter until the 5th year. Thereafter, growth will level off at 1.9 % 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 7.4 % ?

Assume Gillette Corporation will pay an annual dividend of $ 0.64 one year from now. Analysts expect this dividend to grow at 11.3 % per year thereafter until the 5th year. Thereafter, growth will level off at 1.9 % 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 7.4 % ?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Assume Gillette Corporation will pay an annual dividend of $0.61 one year from now. Analysts expect this dividend to grow at 11.9% per year thereafter until the 6th year. Thereafter, growth will level off at 2.1% 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 7.5%? The value of Gillette's stock is $ (Round to the nearest cent.)
Gillette Corporation will pay an annual dividend of $ 0.63 one year from now. Analysts expect this dividend to grow at 1 1.1 % per year thereafter until the 6th year. Thereafter, growth will level off at 1.6 % per year. According to the dividend- discount model, what is the value of a Gillette share if the firm's equity cost of capital is 8.4 %? Question content area bottom Part 1 The value of a Gillette share is $ enter your response here. (Round to the nearest cent.)
Suppose ABC Corp is expected to pay $2.00 per year in dividends per share for the foreseeable future. If the required return on their stocks is 12.15%, what is one share worth?
Assume Gillette Corporation will pay an annual dividend of $0.63 one year from now. Analysts expect this dividend to grow at 12.6% per year thereafter until the 6th year. Thereafter, growth will level off at 1.6% 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 7.7%? The value of Gillette's stock is $ (Round to the nearest cent.)
K thereafter Assume Gillette Corporation will pay an annual dividend of $0.65 one year from now. Analysts expect this dividend to grow at 11.5% per year until the 6th year. Thereafter, growth will level off at 2:2% 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 8.4%? The value of Galetle's stock is $ (Round to the nearest cont.) CID
Colgate-Palolive company has just paid an annual dividend of $1.37. Analysts are predicting dividends to grow by S 0.11 per year over the next five years. After then, Colgates earnings are expected to grow 6.4% per year, and its dividend payout rate will remain constant. If Colgates equity cost of capital is 7.4% pear year, what price does the dividend discount model predict Colgate stock should sell for today?
Anle Corporation has a current price of $13, is expected to pay a dividend of $2 in one year, and its expected price right after paying that dividend is $22. What is Anle's expected dividend yield? (Round to two decimalplaces.) What is Anle's expected capital gain rate? (Round to two decimalplaces.) What is Anle's equity cost of capital? (Round to two decimalplaces.)
Assume Gillette Corporation will pay an annual dividend of $0.61 one year from now. Analysts expect this dividend to grow at 11.5% per year thereafter until the 6th year. Thereafter, growth will level off at 2.3% 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 8.4%? The value of Gillette's stock is $ (Round to the nearest cent.)
Gillette Corporation will pay an annual dividend of $0.61 one year from now. Analysts expect this dividend to grow at 11.4% per year thereafter until the 5th year. Thereafter, growth will level off at 2.2% per year. According to the dividend discount model, what is the value of a Gillette share if the firm's equity cost of capital is 8.9% ?
Dorpac Corporation has a dividend yield of 1.4%. Its equity cost of capital is 7.8%, and its dividends are expected to grow at a constant rate. a. What is the expected growth rate of Dorpac's dividends? b. What is the expected growth rate of Dorpac's share price? a. What is the expected growth rate of Dorpac's dividends? The growth rate will be %. (Round to one decimal place.)
Pearson stock will pay an annual divident of $.26 next year. If after that, the dividend grows 2% per year and Pearson has a 6% cost of equity capital, what is Pearson's projeted stock price under the Constant Dividend Growth Model? Choose the closest. a) $4.33 b) $6.50 c) $9.80 d) $13.00
Assume that shareholder's required rate of return (r) is 9%. Dr. Pepper is expected to pay a dividend of $2.00 per share (D1) next year. Moreover, investors expect dividends to grow at a constant rate of 4% per year (g). According to the Dividend Discount Model, what should be the current price per share of Dr. Pepper?

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