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5 March, 23:36

Integrated Potato Chips paid a $1 per share dividend yesterday. You expect the dividend to grow steadily at a rate of 4% per year. a. What is the expected dividend in each of the next 3 years

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  1. 5 March, 23:48
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    The expected dividend in year 3 = $1.12

    Explanation:

    The expected dividend is the dividend payable at a certain date in the future. To determine the value, we multiply the dividend at a certain time by the expected growth rate.

    Year Workings Expected dividend

    1 1 * 1.04 = 1.04

    2 1.04 * 1.04 = 1.08

    3 1.08 * 1.04 = 1.12

    The expected dividend in year 3 = $1.12
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