Question

In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two plans. The values represent dividends per share. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Plan A Plan B 1 $ 1.10 $ 0.10 2 1.10 1.20 3 1.10 0.20 4 1.70 4.50 5 1.70 1.80 a. How much in total dividends per share will be paid under each plan over five years

Answer 1

Answer:

For Plan A = 6.7  

For Plan B = 7.8

Explanation:

Data Given:

First of all, we need to sort out the data because it is very necessary to solve for this question requirement.

Year 1  

Plan A = 1.10 Plan B = 0.10

Year 2

Plan A = 1.10 Plan B = 1.20

Year 3

Plan A = 1.10 Plan B = 0.20

Year 4

Plan A = 1.70 Plan B = 4.50

Year 5

Plan A = 1.70 Plan B = 1.80

Total Number of Years = 5

Now, in order to calculate the total number of dividend per share over the 5 years time period. We need to sum the individual entries of Plans.

So,

For Plan A:

Total number of dividend per share = 1.10 + 1.10 + 1.10 + 1.70 + 1.70 = 6.7

Total number of dividend per share = 6.7  

Similarly,

For Plan B:

Total number of dividend per share = 0.10 + 1.20 + 0.20 + 4.50 + 1.80 = 7.8  

Total number of dividend per share = 7.8