Question

The Soda Pop Shoppe has adopted a policy of increasing its annual dividend at a constant rate of 1.35 percent annually. The company just paid its annual dividend of $1.84. What will the dividend be nine years from now

Answer 1

$2.08

Step-by-step explanation:

Calculation for what will the dividend be nine years from now

Using this formula

Dt-1=Div1(1+g)^t

Where,

Dt-1=9years-1

Div1=$1.84

(1+g)=(1+0.0135

t= 9 years

Let plug in the formula

D9-1= $1.84(1+0.0135)^9

D8=$1.84(1.0135)^9

D8=$1.84(1.1282)

D8 = $2.08

Therefore what will the dividend be nine years from now will be $2.08