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Estimate of the dividend growth

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Assume that Pepsi Company has a share price of $43. The firm will pay a dividend of $1.24 in one year, and you expect Pepsi to raise this dividend by approximately 7% per year in perpetuity. Pls show work

A) If Pepsi equity costs of capital is 8%, what share price would you expect based on your estimate of the dividend growth?

Reference no: EM132477921

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