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just paid an annual dividend of $3.00 per share last year. Management just announced that future dividends will increase by 2 percent annually. What is the amount of the expected dividend in year 5 g
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just paid an annual dividend of $3.00 per share last year. Management just announced that future dividends will increase by 2 percent annually. What is the amount of the expected dividend in year 5 g

User Tanner Sansbury
by
5.4k points

1 Answer

4 votes

Answer: $3.31

Step-by-step explanation:

Dividends will increase by 2% so using a future value formula would show the amount of dividends in year 5.

= 3 * ( 1 + 2%)⁵

= 3 * 1.1040808032‬

= ‭3.3122424096‬

= $3.31

User ErEcTuS
by
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