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Applying the Dividend-Discount Model

Procter & Gamble will pay an annual dividend of $.65 one year from now. Analysts expect this dividend to grow at 12% per year thereafter until the fifth year. After then, growth will level off at 2% per year. According to the dividend-discount model, what is the value of a share of procter & Gamble stock if the firm's equity cost of captial is 8%?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92054835

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