Solution-Dividend payout ratio remains constant

Dividend payout ratio remains constant

Reference no: EM131061162

Colgate Palmolive Corp. has just paid an annual dividend of $1.05. Analysts are predicting a(n) 11.4% per year growth rate in earnings over 5 years. After that, Colgates earnings are expected to grow at the current industry average of 4.9% per year. If Colgate's equity cost of capital is 7.6% per year and its dividend payout ratio remains constant, what price does the dividend discount model predict Colgate stock should sell for?

Reference no: EM131061162

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Dividend payout ratio remains constant : If Colgate's equity cost of capital is 7.6% per year and its dividend payout ratio remains constant, what price does the dividend discount model predict Colgate stock should sell for?

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Dividend payout ratio remains constant

Reference no: EM131061162

Reference no: EM131061162

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