Question

Logistics Corporation recently paid a dividend per share of $5. The company's dividend grows at a constant rate of 8% annually. Based on this information. What is the dividend in 6 years? Dt=𝐷𝑜 ∗ 〖(1+𝑔)〗^𝑡

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1. Given:

- Current dividend,D_o = 5

- Growth rate,g = 0.08

- Time period,t = 6

2. Formula for future dividend:

D_t = D_o * (1 + g)^t

3. Substitute the given values:

D_t = 5 * (1 + 0.08)^6

4. Calculate the growth factor:

(1 + 0.08)^6

5. Find the growth factor value:

(1.08)^6 \approx 1.5868743221

6. Calculate the future dividend:

D_t=5*1.5868743221\approx7.93437

7. Round to two decimal places:

D_t \approx 7.93

Final answer:7.93

- Current dividend,

- Growth rate,

- Time period,

2. Formula for future dividend:

3. Substitute the given values:

4. Calculate the growth factor:

5. Find the growth factor value:

6. Calculate the future dividend:

7. Round to two decimal places:

Final answer:

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