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28 April, 10:11

Atlas Mines has adopted a policy of increasing the annual dividend on its common stock at a constant rate of 2.75 percent annually. The firm just paid an annual dividend of $1.67. What will the dividend be six years from now

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  1. 28 April, 10:41
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    1.9652

    Explanation:

    Data provided in the question

    Annual dividend at constant rate = 2.75%

    Annual dividend = $1.67

    So by considering the above information, the dividend be six years from now is

    = Annual dividend * (1 + growth rate) ^number of years

    = $1.67 * (1 + 2.75%) ^6

    = $1.67 * 1.1767

    = 1.9652

    We simply apply the above formula so that the dividend after six year could come
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