Brigham and Houston just paid a dividend of $2.00. The dividend is expected to grow 25% a year for the next 3 years and then at a rate of 6% a year thereafter. What is the expected dividend per share for Year 4?
We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
Dividend for year 4=$2*(1.25)^3*(1.06)
=$2*2.0703125
=$4.140625
Brigham and Houston just paid a dividend of $2.00. The dividend is expected to grow 25%...
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