Warr Corporation just paid a dividend of $1

Finance Dec 21, 2020

Warr Corporation just paid a dividend of $1.5 a share. The dividend is expected to grow 20.60% a year for the next 3 years and then at 5% a year thereafter. What is the expected dividend per share for each of the next 4 years?

Expert Solution

Given, D0=1.5

D1=1.5*(1+20.6%)=1.809

D2=1.809*(1+20.6%)=2.182

D3=2.182*(1+20.6%)=2.631

D4=2.631*(1+5%)=2.763

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