Question

Dani's just paid an annual dividend of $6 per share. What is the dividend expected to be in five years if the growth rate is 4.2%

Answer 1

the dividend expected in five years is $7.37

Step-by-step explanation:

The computation of the dividend expected in five years is as follows;

As we know that

Future value = Present value × (1 + rate of interest)^time period

Dividend at year 5 = $6 × (1.042)^5

= $6 × 1.228396569

= $7.37

Hence, the dividend expected in five years is $7.37

The same is to be considered