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Assume Gillette Corporation will pay an annual dividend of $0.62 one year from now. Analysts...

70.2K

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Question

Finance

Assume Gillette Corporation will pay an annual dividend of

$0.62

one year from now. Analysts expect this dividend to grow at

11.3%

per year thereafter until the

4th

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

7.6%?

Answer & Explanation Solved by verified expert
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