In mid-2018, some analysts recommended that General Electric (GE) suspend its dividend payments to preserve cash needed for investment. Suppose you expected GE to stop paying dividends for two years before resuming an annual dividend of $1.25 per share, paid 2years from now, growing by 3.2% per year. If GE's equity cost of capital is 8.9%, estimate the value of GE's shares today.

The price today is $___?

Answer rating: 100% (QA)

Solution Price recent dividend 1 growth rate cost of equity growt... View the full answer