Question

1) Firm ABC is going to pay an annual dividend of $2.00 per share next year....

1) Firm ABC is going to pay an annual dividend of $2.00 per share next year. Management just announced that future dividends will increase by 2 percent annually. What is the amount of the expected dividend in year 5?

2) Firm ABC is going to pay an annual dividend of $2.00 per share next year. Management just announced that future dividends will increase by 5 percent annually in the first two years and 2 percent annually afterwards. What is the amount of the expected dividend in year 5?

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Expected dividend in year 5 = $2.16 2*1.0214Expected dividend in year 5 = $2.29 2*1.05^2*1.0242

Add a comment
Know the answer?
Add Answer to:
1) Firm ABC is going to pay an annual dividend of $2.00 per share next year....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT