Macro Computers just paid their annual regular cash dividend of $1.20 a share,along with a special dividend of $0.30 a share.The company follows a policy of increasing their dividend by 2 per cent annually.Which one of the following is the best estimate of Macro's next annual dividend amount?

Question

Quizplus · Accepted Answer

The regular dividend is increased by 2% annually, so the next regular dividend will be $1.20 x 1.02 = $1.224. Adding the special dividend of $0.30 gives a total dividend of $1.224 + $0.30 = $1.524, which is closest to $1.22.

Macro Computers Just Paid Their Annual Regular Cash Dividend of $1.20