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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Answer to a math 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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4.586 Answers
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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