The CFO of General Electric corporation is deciding if his company should invest 500,000 shares of Lightbridges industries.They manufacture innovative smart led light systems for residential homes.Lightbridge industries stock price is currently listed at $24.84 per share, and the expected dividend yield is 5.4%.
a) What is the expected value of the first dividend payment at the end of the year?
b)How would you use the dividend yield model to value the price of a stock if it presently does not pay dividends but is expected to pay dividends in the future?
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