Calculate the Expected Dividend in 6 Years

What is the expected dividend to be in 6 years?

If burler corp. pays an annual dividend on its common stock that is expected to grow by 4.47 percent per year forever, the next dividend is due in 1 year, and the next dividend is expected to be $2.76, then what is the dividend expected to be in 6 years?

Expected Dividend in 6 Years

The dividend expected to be in 6 years will be $3.62.

In order to calculate the expected dividend in 6 years, we can use the formula:

D_n = D₀(1 + g)ⁿ

Where:

D₀ = $2.76

g = 4.47% or 0.0447

n = 6 years

Plugging the values into the formula, we get:

D₆ = $2.76(1 + 0.0447)⁶

D₆ = $2.76(1.0447)⁶

D₆ = $2.76 x 1.3107

D₆ = $3.6182

Therefore, the expected dividend to be in 6 years will be $3.62 (rounded to the 100th decimal).