The Glass Ceiling paid an annual dividend of $2.20 per share last year.Management just announced that future dividends will increase by 2.8 per cent annually.What is the amount of the expected dividend in year five?

Question

Quizplus · Accepted Answer

To find the expected dividend in year five, use the formula for future dividends: D5 = D0 * (1 + g)^5, where D0 is the last dividend ($2.20), and g is the growth rate (2.8% or 0.028). Calculating: D5 = $2.20 * (1 + 0.028)^5 ≈ $2.53.

The Glass Ceiling Paid an Annual Dividend of $2