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QUESTION
Kenneth Cole Productions (KCP), suspended its dividend at the start of 2009. Suppose you do not expect KCP to resume paying dividends until 2011.You...
Kenneth Cole Productions (KCP), suspended its dividend at the start of 2009. Suppose you do not expect KCP to resume paying dividends until 2011.You expect KCP’s dividend in 2011 to be $0.40 per year (paid at the end of the year), and you expect it to grow by 5% per year thereafter. If KCP’s equity cost of capital is 11%, what is the value of a share of KCP at the start of 2009?
