Homework answers / question archive / Procter & Gamble will pay an annual dividend of $0

Procter & Gamble will pay an annual dividend of $0

Finance

Share With

Procter & Gamble will pay an annual dividend of $0.65 one year from now. Analysts expect this dividend to grow at 12% per year thereafter until the fifth year. After then, growth will level off at 2% per year. What is the value of a share of Procter & Gamble stock if the firm’s equity cost of capital is 8%?