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(Solved): Assume Gillette Corporation will pay an annual dividend of $0.65 one year from now. Analysts expect ...



Assume Gillette Corporation will pay an annual dividend of

$0.65

one year from now. Analysts expect this dividend to grow at

11.7%

per year thereafter until the 4 th year. Thereafter, growth will level off at

2.4%

per year. According to the dividend-discount model, what is the value of a share of Gillette stock if the firm's equity cost of capital is

8.9%

? The value of Gillette's stock is

$

(Round to the nearest cent.)



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