Colgate-Palmolive Company has just paid an annual dividend of $0.96. Analysts are predicting an 11.0% 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 5,2% per year. If Colgate's equity cost of capital is 8.5% per year and its dividend payout ratio remains constant, for what price does the DDM predict Colgate stock should sell? The value of Colgate's stock is $(Round to the nearest cent.) CLOOD

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
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Colgate-Palmolive Company has just paid an annual dividend of $0.96. Analysts are predicting an 11.0% 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 5.2% per year. If Colgate's equity cost of capital is 8.5% per year and its dividend
payout ratio remains constant, for what price does the DDM predict Colgate stock should sell?
The value of Colgate's stock is $(Round to the nearest cent.)
COLC
Transcribed Image Text:Colgate-Palmolive Company has just paid an annual dividend of $0.96. Analysts are predicting an 11.0% 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 5.2% per year. If Colgate's equity cost of capital is 8.5% per year and its dividend payout ratio remains constant, for what price does the DDM predict Colgate stock should sell? The value of Colgate's stock is $(Round to the nearest cent.) COLC
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