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If a company pays a dividend of $0.50 per share and this dividend is expected to...

If a company pays a dividend of $0.50 per share and this dividend is expected to rise at a constant rate of 5%, what dividend amount will be paid in 40 years?

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Expert Solution

Present Value = $0.50

Time Period = 40 years

Interest rate = 5%

By formula,

Future Value = 0.50(1.05)⁴⁰

Future Value = $3.52

jeff jeffy answered 2 years ago
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