What would investors be willing to pay for the stock today

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Reference no: EM132665662

Problem 1: Due to economic challenges XYZ Corp ha suspended its dividend for 2 years. The following year, 3 years from today, they will rsume dividend payments with a dividend of $1.75 and intends to grow the dividend at a constant rate of 3.2%. If investors require a rate of return of 7.5% what would investors be willing to pay for the stock today?

Option 1: $32.76

Option 2: $35.22

Option 3: $42.56

Option 4: $40.70

Reference no: EM132665662

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