Price does dividend-discount model predict colgate stock

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Reference no: EM131185247

Colgate-Palmolive company has just paid an annual dividend of $0.97. Analysts are predicting a 10.6% per year growth rate in earnings over the next five years. after that, colagtes earnings are expected to grow at the current industry average of 5.3% per year. If colgates equity cost of capital is 8.5% per year and its dividend payrout ration remains constant, what price does the dividend-discount model predict colgate stock should sell for?

Reference no: EM131185247

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