XYZ firm plans to pay three annual special dividends of $3 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 $2.16 and increase that dividend by 2.61% per year indefinitely. Assuming a discount rate of 8.72%.

Calculate the intrinsic value of XYZ firm's stock today.

Answer rating: 100% (QA)

To calculate the intrinsic value of XYZ firms stock today we need to find the present ... View the full answer