Solved: If colgates equity cost of capital is 86 per year and its, Basic Statistics

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If colgates equity cost of capital is 86 per year and its

Assume Colgate-Palmolive Company has just paid an annual dividend of $0.97. Analysts are predicting an 10.2% 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 5.4% per year. If Colgate's equity cost of capital is 8.6% per year and its dividend payout ratio remains constant, for what price does the dividend-discount model predict Colgate stock should sell?

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Basic Statistics: If colgates equity cost of capital is 86 per year and its

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