Assume Gillette Corporation will pay an annual dividend of $0.61 one year from now. Analysts expect this dividend togrow at 11.5% per year thereafter until the 6th year. Thereafter, growth will level off at 2.3% per year. According tothe 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.)

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what is the value of a share of Gillette stock if the firm's equity cost of capital is 8.4%?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 15P

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