Xyz firm plans to pay three annual special dividends of 1, Ask an Expert

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XYZ firm plans to pay three annual special dividends of $1 per share over the next three years to reflect the windfall from the completion of a major successful project. Thereafter, starting exactly four years from today, the firm plans to pay a dividend of $2.84 and increase that dividend by 1.97% per year indefinitely. Assuming a discount rate of 7.14%, calculate the intrinsic value of XYZ firm's stock today.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92839355

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