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Techworld is expecting to pay out a dividend of $3.49 next year (year 1). After that...

Techworld is expecting to pay out a dividend of $3.49 next year (year 1). After that it expects its dividend to grow at 3 percent per annum for the next five years (for years 2 to 6). What is the dividend that is expected to be paid in year 3? (to nearest cent; don’t include $ sign)

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Answer #1

Dividend expected in year 3 = 3.49*(1+3%)2 = 3.70

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