What price does the? dividend-discount model

Assignment Help Financial Management

Reference no: EM131339634

Colgate-Palmolive Company has just paid an annual dividend of $1.03. Analysts are predicting? a(n) 10.6 % per year growth rate in earnings over the next five years. After? that, Colgate's earnings are expected to grow at the current industry average of 4.8 % per year. If? Colgate's equity cost of capital is 9.2 % per year and its dividend payout ratio remains? constant, what price does the? dividend-discount model predict Colgate stock should sell? for?

The price per share is ?$ (Round to two decimal? places.)

Reference no: EM131339634

Questions Cloud

Purchasing the asset requires capital cost : Calculate the NPV of an investment with the following conditions and then conclude which one is better. Purchase the Asset: purchasing the asset requires capital cost of 400,000 (at time 0) and can be depreciated based on MACRS 7 year life depreciati..

Assume the risk free rate and the beta remain unchanged : A stock has a required return of 10%, the risk free rate is 4% and the market risk premium is 6%. What is the stock's beta? If the market risk premium increased to 8% what would happen to the stock's required rate of return? Assume the risk free rate..

Dividends were paid to shareholders during the year : In its most recent financial statements, Newhouse Inc. reported $35 million of net income and $665 million of retained earnings. The previous retained earnings were $632 million. How much in dividends were paid to shareholders during the year? Assume..

What is the company unlevered cost of equity capital : Calculating WACC [LO1] Twice Shy Industries has a debt−equity ratio of 1.1. Its WACC is 8.2 percent, and its cost of debt is 6.4 percent. The corporate tax rate is 35 percent. What is the company’s cost of equity capital? What would the cost of equit..

What price does the? dividend-discount model : Colgate-Palmolive Company has just paid an annual dividend of $1.03. Analysts are predicting? a(n) 10.6 % per year growth rate in earnings over the next five years. After? that, Colgate's earnings are expected to grow at the current industry average ..

What was average nominal risk premium on the stock : You’ve observed the following returns on Barnett Corporation’s stock over the past five years: –24.9 percent, 13.6 percent, 30.2 percent, 2.3 percent, and 21.3 percent. What was the average real return on the stock? What was the average nominal risk ..

Determine its weighted average cost of capital : The Accidental Petroleum Company is trying to determine its weighted average cost of capital for use in making a number of investment decisions. The firm's bonds were issued 6 years ago and have 14 years left until maturity. Calculate the costs of th..

Equipment will be depreciated on a straight-line basis : The project will require that the company spend $4.5 million today (t = 0) to purchase additional equipment. For tax purposes the equipment will be depreciated on a straight-line basis over 5 years. The project will require an increase in net operati..

Estimate of the company cost of equity : Stock in Daenerys Industries has a beta of 1.2. The market risk premium is 9 percent, and T-bills are currently yielding 4.6 percent. The company’s most recent dividend was $1.80 per share, and dividends are expected to grow at an annual rate of 8 pe..

User Account

All Pages