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The Barry Bluejeans Denim Co. will pay a dividend of $100 one year from now. Subsequent dividends will rise by 6% for the nex

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Answer #1

c. $1454

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

C D 1 Dividend $100.00 $106.00 $112.36 $119.10 $119.10 5 and on Annual discount rate 8% Terminal value at end of 4th year $1,

Cell reference -

B Year Dividend 100 =C3*(1+0.06) =C4*(1+0.06) C5*(1+0.06) =C6 5 and on Annual discount rate 0.08 Terminal value at end of 4th

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.

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