Hi, Can, you help me wiht the dividend discount model when dividends are not paid next your but will be paid in 3 years and have constant growth after that, for example. Like here : GXG Co could suspend dividends for two years, and then pay dividends of 25 cents per share from the end of the third year, increasing dividends annually by 4% per year in subsequent years. Dividends in recent years have grown by 3% per year Thank you
You use the dividend growth model, but because the dividends don’t start for 3 years (instead of in 1 year) you need to discount for the extra 2 years.