Question
In: Finance
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two...
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two plans. The values represent dividends per share. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Plan A Plan B 1 $ 1.10 $ .10 2 1.10 1.60 3 1.10 .20 4 1.50 3.50 5 1.50 1.60 a. How much in total dividends per share will be paid under each plan over five years? (Do not round intermediate calculations and round your answers to 2 decimal places.) b-1. Mr. Bright, the vice president of finance, suggests that stockholders often prefer a stable dividend policy to a highly variable one. He will assume that stockholders apply a lower discount rate to dividends that are stable. The discount rate to be used for Plan A is 11 percent; the discount rate for Plan B is 13 percent. Compute the present value of future dividends. (Do not round intermediate calculations and round your answers to 2 decimal places.) b-2. Which plan will provide the higher present value for the future dividends? Plan A Plan B
Solutions
jeff jeffy answered 7 months agoRelated Solutions
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two...
In doing a five-year analysis of future dividends, the Dawson
Corporation is considering the following two plans. The values
represent dividends per share. Use Appendix B for an approximate
answer but calculate your final answer using the formula and
financial calculator methods.
Year
Plan A
Plan B
1
$
1.50
$
0.40
2
1.50
2.50
3
1.50
0.30
4
1.80
4.00
5
1.80
1.60
a. How much in total dividends per share will
be paid under each plan over five...
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two...
In doing a five-year analysis of future dividends, the Dawson
Corporation is considering the following two plans. The values
represent dividends per share. Use Appendix B for an approximate
answer but calculate your final answer using the formula and
financial calculator methods.
Year
Plan A
Plan B
1
$
1.60
$
0.40
2
1.60
2.00
3
1.60
0.20
4
2.00
4.00
5
2.00
1.40
a. How much in total dividends per share will
be paid under each plan over five...
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two...
In doing a five-year analysis of future dividends, the Dawson
Corporation is considering the following two plans. The values
represent dividends per share. Use Appendix B for an approximate
answer but calculate your final answer using the formula and
financial calculator methods.
Year
Plan A
Plan B
1
$
1.50
$
.50
2
1.50
2.30
3
1.50
.30
4
1.90
3.00
5
1.90
1.30
a. How much in total dividends per share will be
paid under each plan...
A company is considering the following two dividend policies for the next five years. Year Policy...
A company is considering the following two dividend policies for
the next five years.
Year
Policy #1
Policy #2
1
$4.00
$6.00
2
$4.00
$2.70
3
$4.00
$5.00
4
$4.00
$3.10
5
$4.00
$3.20
Create an Excel spreadsheet to organize your answers to
the following problem, and submit your Excel file as an
attachment
Part 1: How much total dividends per share will
the stockholders receive over the five year period under each
policy?
Part 2: If investors see no...
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Assume a corporation is expecting the following cash flows in the future: $-8 million in year...
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Enter your answer in dollars, rounded to the nearest cent.
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