Calculate the intrinsic value of xyz firm stock today

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XYZ firm plans to pay three annual special dividends of $2 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 $2.83 and increase that dividend by 1.59% per year indefinitely. Assuming a discount rate of 10.64%, calculate the intrinsic value of XYZ firm's stock today.

Reference no: EM132011688

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