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Business, 14.11.2019 06:31 ani69

Procter and gamble (pg) has a june fiscal year-end. on june 30, 2006, analysts expected the company to pay $1.33 dividends per share in fiscal year 2007. the company's market beta is estimated to be 0.7. assume that the risk-free rate is 5.7% and the market premium is 5%. during fiscal year 2006, the company's sales growth was 20.2%. however, analysis reveals that p& g's fiscal 2006 sales include eight months of sales from gillette after its acquisition by p& g during 2006. footnotes report pro forma sales that show what the income statement would have reported had gillette's full-year sales been included in both 2005 and 2006—specifically, p& g's sales growth would have been 4.4%.
(a) estimate p& g's cost of equity capital using the capm model. (round your answer to one decimal place.)

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Procter and gamble (pg) has a june fiscal year-end. on june 30, 2006, analysts expected the company...
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