Problem 91 DPS calculation Warr Corporation just paid a divi

Problem 9-1 DPS calculation Warr Corporation just paid a dividend of $3 a share (that is, Do = $3). The dividend is expected to grow 8% a year for the next 3 years and then at 396 a year thereafter, what is the expected dividend per share for each of the next 5 years? Round your answers to two decimal places. D2- $ D3-$

Solution

D1 $       3.24 D2 $       3.50 D3 $       3.78 D4 $       3.89 D5 $       4.01 Working: Schedule of dividend of each of the next 5 years: Year Last dividend Growth rate Current Dividend a b c=a*(1+b) 1 $       3.00 8% $       3.24 2 $       3.24 8% $       3.50 3 $       3.50 8% $       3.78 4 $       3.78 3% $       3.89 5 $       3.89 3% $       4.01