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Sam Inc. has $33000 dollars that it wishes to pay out as dividends, and a cost...

Sam Inc. has $33000 dollars that it wishes to pay out as dividends, and a cost of equity of 0.23. If it pays out $25000 in dividends today, what dividend should they pay 3 year from today to make shareholders indifferent between this dividend scheme and one where shareholders get all of the cash today?

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Answer #1

Function Arguments X FV Rate 23% 0.23 Nper 3 Pmt 0 0 Pv 25000 25000 Туре d -46521.675 Returns the future value of an investme

Hence, Indifference dividend payment in 3 years was $46,522

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