Question

Weisbro and Sons common stock sells for $24 a share and pays an annual dividend that increases by 4.9 percent annually. The market rate of return on this stock is 10.6 percent. What is the amount of the last dividend paid by Weisbro and Sons

Answer 1

Answer:

The amount of the last dividend paid by this company was $1.30/share.

Explanation:

Hi, in order to find the last dividend paid by the company, we need to use the following equation.

$Do=\frac{Price(r-g)}{(1+g)}$

Where:

Do = Last dividend paid

r = Market rate of return

g = annual growth rate

So, everything should look like this.

$Do=\frac{24(0.106-0.049)}{(1+0.049)} =1.304099$

Therefore, the last dividend paid by the company was $1.30/Share.

Best of luck