If the dividend yield for year 1 is expected to be 5% based on a stock price of $25,what will the year 4 dividend be if dividends grow annually at a constant rate of 6%?
A) $1.33
B) $1.49
C) $1.58
D) $1.67

Name: If the dividend yield for year 1 is expected to be 5% based on a stock price of $25,what will the year 4 dividend be if dividends grow annually at a constant rate of 6%? A) $1.33 B) $1.49 C) $1.58 D) $1.67
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Question

Quizplus · Accepted Answer

DIV₄ = (0.05 × $25) × 1.06³ = $1.49

If the Dividend Yield for Year 1 Is Expected to Be