Gillette Corporation will pay an annual dividend of Rs 0.65/ share one year from now. Analysts expect this dividend to grow at a rate of 12% per year until the 5th year. After that period; the growth rate will level up at a rate of 2% per year. According to the Dividend Growth Model, what is the value of a share of Gillette Corporation if the firm's cost of equity is 8%.
Gillette Corporation will pay an annual dividend of Rs 0.65/ share one year from now. Analysts expect this dividend to grow at a rate of 12% per year until the 5th year. After that period; the growth rate will level up at a rate of 2% per year. According to the Dividend Growth Model, what is the value of a share of Gillette Corporation if the firm's cost of equity is 8%.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 1P: Thress Industries just paid a dividend of 1.50 a share (i.e., D0 = 1.50). The dividend is expected...
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