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Travka [436]
3 years ago
11

A stock expects to pay a dividend of $5.49 per share next year. Dividends are expected to grow at 20 percent per year for the fo

llowing three years. Thereafter, the dividend growth rate is expected to be 3.5 percent per year forever. Investors require a rate of return of 12 percent on this stock. Calculate the annual dividend expected to be paid by the stock nine years from today (D9).
Business
1 answer:
navik [9.2K]3 years ago
5 0

Answer:

The annual dividend expected to be paid by the stock nine years from today (D9) is $11.27 per share.

Explanation:

Note: See the attached excel file for the calculations of annual dividends expected to be paid the stock for Years 1 to 9.

In the attached excel file, the following formula is used:

Current year dividend = Previous year dividend * (100% + Growth rate)

From the attached excel file, the annual dividend expected to be paid by the stock nine years from today (D9) is $11.27 per share (Note: see the bold red color under the Year's 9 Current Year Dividend).

Download xlsx
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<h3>What purpose do markets serve?</h3>
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Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $420,000; Allowance for Doub
Fiesta28 [93]

Answer and Explanation:

The computation is shown below:

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3 years ago
Eunice tells a colleague, "i wish professor carlson would retire. he's got a nice big office and the department can't afford to
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Answer:

recruitment is the correct answer.

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​Traditionally, Fed policymakers have been​ ________ to use higher interest rates to head off potential asset bubbles​ ________.
r-ruslan [8.4K]

Answer:

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