2A. Firm ABC paid an annual dividend of $2.00 per share last year. Management just announced...
2A. Firm ABC paid an annual dividend of $2.00 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?
/2B. Firm ABC paid an annual dividend of $2.00 per share last year. Management just announced that future dividends will increase by 5 percent annually in the first two years and 2 percent annually afterwards. What is the amount of the expected dividend in year 5?
Homework Answers
2A
What is the amount of the expected dividend in year 5
=2.00*(1+2%)^5
=2.21
2B
What is the amount of the expected dividend in year 5
=2.00*(1+5%)^2*(1+2%)^3
=2.34
the above is answer..
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