If colgates equity cost of capital is 76 per year and its


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?

Solution Preview :

Prepared by a verified Expert
Finance Basics: If colgates equity cost of capital is 76 per year and its
Reference No:- TGS01406992

Now Priced at $20 (50% Discount)

Recommended (90%)

Rated (4.3/5)