Question

The Garden Shoppe has adopted a policy of increasing the annual dividend on its common stock at a constant rate of 1.65 percent annually. The firm just paid an annual dividend of $1.84. What will the dividend be eight years from now?

Answer 1

Answer:

In order to find the dividend 8 years from now we will use the formula D*(1+R)^N

Right now

D= 1.84

R=1.65%

N= 8

1.84*(1.0165)^8

=2.097

The dividend 8 years from now will be $2.097.

Explanation: