The Olde Mill ust paid an annual dividend of 38 a share and

The Olde Mill ust paid an annual dividend of $.38 a share and plans on decreasing this amount by 1 percent annually. What is the expected dividend for Year 6? Mutiple Choice $ 3542 $.3578 O s3002

Solution

As per given information ......... D₀ = 38

Annually growth rate is declining ....... so negative growth rate = - 0.01

We have to calculate D₆ = D₀ ( 1+ g)⁶

= 38 ( 1 - 0.01)⁶ = 35.78 ................ select Option - C