Question

The Glass Ceiling paid an annual dividend of $1.64 per share last year and just announced that future dividends will increase by 1.3 percent annually. What is the amount of the expected dividend in Year 6

Answer 1

Answer:

$1.77

Explanation:

Calculation for the amount of the expected dividend in Year 6

Using this formula

Year 6 Expected Dividend=Annual dividend ×(1+Future dividends increase)^ Number of years

Let plug in the formula

Year 6 Expected Dividend=$1.64 ×(1.013)^6

Year 6 Expected Dividend= $1.64 ×(1+.013)^6

Year 6 Expected Dividend= $1.77

Therefore the amount of the expected dividend in Year 6 will be $1.77