For what price does the dividend-discount model predict

Assignment Help Finance Basics

Reference no: EM132027221

Question: Assume Colgate-Palmolive Company has just paid an annual dividend of $ 0.99

Analysts are predicting an 10.1% 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 5.3 % per year. If Colgate's equity cost of capital is 7.8 % per year and its dividend payout ratio remains constant, for what price does the dividend-discount model predict Colgate stock should sell?

Reference no: EM132027221

Questions Cloud

Which of the two expansion options would you choose : The firm you own is a small one. This project would strain your resources, and the firm might struggle for some time if returns from the project turned out.

What is the value of performing hypotheses tests : What is the value of performing hypotheses tests to solve problems related to business and operations management?

How classism is demonstrated in the hernandez video : Identify specific barriers to social services that the Hernandez family experiences because of their class status (e.g., working poor).

What percentage of gmat scores are 747 or higher : What percentage of GMAT scores are 747 or higher (to 1 decimal)?

For what price does the dividend-discount model predict : Analysts are predicting an 10.1% per year growth rate in earnings over the next five years. After that, Colgate's earnings are expected to grow.

Describe the outcomes of experiment : Describe the outcomes of this experiment. List the elements of the sample space.

Explain the state public assistance policies : Explain the state public assistance policies that might help Eboni manage the responsibilities of parenthood.

How long will take you to pay off the loan : You have an outstanding student loan with required payments of $550 per month for the next four years. The interest rate on the loan is 8% APR.

How the potential perception of dependency might contribute : Explain the perceptions you have regarding people who receive means-tested welfare and how that perception might affect your work with clients.

User Account

All Pages