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13 March, 15:13

The Garden Shoppe has adopted a policy of increasing the annual dividend on its common stock at a constant rate of 1.65 percent annually. The firm just paid an annual dividend of $1.84. What will the dividend be eight years from now?

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  1. 13 March, 15:40
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    In order to find the dividend 8 years from now we will use the formula D * (1+R) ^N

    Right now

    D = 1.84

    R=1.65%

    N = 8

    1.84 * (1.0165) ^8

    =2.097

    The dividend 8 years from now will be $2.097.
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