In mid-2018, some analysts recommended that General Electric (GE) suspend its dividend payments to preserve cash...

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In mid-2018, some analysts recommended that General Electric (GE) suspend its dividend payments to preserve cash needed for i

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Answer 1

Answer #1

Value at year 1 = Year 2 dividend / required rate - growth rate

Value at year 1 = 1.1 / 0.089 - 0.032

Value at year 1 = 1.1 / 0.057

Value at year 1 = 19.298246

Price Today = Future value / (1 +r)n

Price Today = 19.298246 /(1+ 0.089)

Price Today = $17.72

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Answer 2

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