O & B International just announced it will be paying an annual dividend of $1.10 a share plus an extra dividend of $.41 a share this year.The company also announced that its regular dividend,which is all it anticipates paying after this year,will increase by 2 percent annually.What is the anticipated dividend per share next year?

Question

Quizplus · Accepted Answer

To find the anticipated dividend per share next year, we need to calculate the regular dividend for next year as the extra dividend is a one-time payment. The regular dividend for next year can be found by taking this year's regular dividend and increasing it by 2%.

Current regular dividend = $1.10 
Extra dividend = $0.41 
Anticipated regular dividend next year = $1.10 * 1.02 = $1.122

Therefore, the anticipated dividend per share next year is the sum of the anticipated regular dividend and the extra dividend:

Anticipated dividend per share next year = $1.122 + $0.41 = $1.532

Rounding this answer to the nearest penny, we get $1.12, which is choice C.

O &Amp; B International Just Announced It Will Be Paying