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Due to economic challenges XYZ Corp has suspended its dividend for the next two years. The following year, i.e. 3 years from today, the firm
Due to economic challenges XYZ Corp has suspended its dividend for the next two years. The following year, i.e. 3 years from today, the firm plans to resume dividend payment with a dividend of $2.25 and intends to grow this dividend at a constant rate of 3.4% per year thereafter. If investors require a rate of return of 7.2% for investing in this firm, what would investors be willing to pay for the stock today?
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