Colgate-Palmolive Company has just paid an annual dividend of $1.28. Analysts are predicting dividends to grow by $0.19 per year over the next five years. After then, Colgate's earnings are expected to grow 6.6% per year, and its dividend payout rate will remain constant. If Colgate's equity cost of capital is 9.5% per year, what price does the dividend-discount model predict Colgate stock should sell for today? The price per share is $. (Round to two decimal places.)

Colgate-Palmolive Company has just paid an annual dividend of $1.28. Analysts are predicting dividends to grow by $0.19 per year over the next five years. After then, Colgate's earnings are expected to grow 6.6% per year, and its dividend payout rate will remain constant. If Colgate's equity cost of capital is 9.5% per year, what price does the dividend-discount model predict Colgate stock should sell for today? The price per share is $. (Round to two decimal places.)

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Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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