Nelson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an ann
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Answer:
The amount of the last annual dividend paid is <u>$4.3</u>.
Explanation:
Given:
The common stock of Zeta Group sells for $42 per share, has a rate of return of 12.2 percent, and a dividend growth rate of 1.8 percent annually.
Now, to find the amount of last annual dividend paid.
Let the amount of last annual dividend paid be
Price of per share () =
Rate of return () =
Rate of dividend growth () =
Now, to get the amount of last dividend paid we put formula:
<em>Multiplying both sides by 0.104 we get:</em>
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<em>Dividing both sides by 1.018 we get:</em>
Therefore, the amount of the last annual dividend paid is $4.3.