Question

ABC stock currently sells for $55 a share. Exactly one year ago, its stock was selling for $50 per share. Given that the company just paid its annual dividend of $3.20 per share, and assume that ABC 's dividends have been and will continue to grow at constant pace. How much will its next annual dividend be?

A.$3.50
B.$3.85;
C.$3.52
D.Need more information; can't be figured out;
E.None of the above.

Answer 1

Without the dividend growth rate or previous dividend amounts, it is not possible to accurately calculate the next year's dividend for ABC stock. Therefore, the answer is D. Need more information; can't be figured out.

Step-by-step explanation:

To calculate the expected next annual dividend for ABC stock, we need to determine the stock's dividend growth rate. Since the question does not provide a specific growth rate, we must infer it from the information given. The stock price of ABC a year ago was $50 per share, and it sells for $55 today. The company has also just paid an annual dividend of $3.20 per share. However, without knowing the previous dividends or having the specific growth rate, we cannot accurately compute the next year's dividend. Therefore, the correct answer is D. Need more information; can't be figured out.