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Homework answers / question archive / ABC Corporation just paid dividend of S10 a shure
ABC Corporation just paid dividend of S10 a shure. Dividend is expected to grow at a constant rate g=5%. What is the expected dividend at the end of 5 years? fround your answer to the nearest hundredth, have two digits after decimal place.) Ansur
Current dividend = $10
Growth rate = 5%
Year 1 Dividend
= 10*5% + 10
= $10.50
Year 2
= 10.50*5% + 10.50
= $11.03
Year 3
= $11.03*5% + 11.03
= $11.58
Year 4
= $11.58*5% + 11.58
= $12.16
Year 5
= $12.16*5% + 12.16
= $12.77
Total Dividend
= $10.50 + 11.03 + 11.58 + 12.16 + 12.77
= $58.04
