The value of GE's share today is computed as shown below:
Price in year three is computed as shown below:
= Dividend in year 4 / ( required rate of return - growth rate )
= $ 1.20 / ( 0.087 - 0.032 )
= $ 21.81818182
Now in order to computed the current value, we shall discount the above computed value as follows:
= $ 21.81818182 / 1.0873
= $ 16.99 Approximately
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In mid-2018, some analysts recommended that General Electric (GE) suspend its dividend payments to preserve cash...
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