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Unilever will start to pay an annual dividend of $0

Finance

Unilever will start to pay an annual dividend of $0.85 next year. Analysts then expect this dividend to grow at 10% per year until the end of year five. Thereafter growth will level off at 3% per year forever. According to the dividend-discount model, what is the value of a share of Unilever stock if the firm’s equity cost of capital is 6%?

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