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Computation of Expected Dividend

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Stock A is expected to pay a dividend of $3.00 at the end of the year
(D1 = $3.00). The dividend is expected to grow at a constant rate of 6% per year. The stock currently trades at a price of $50 per share. Stock price is in equilibrium.

What is the stocks expected dividend at the end of Year 2?

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Solution Summary

This explains the steps of computing expected dividends with the help of example.

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Expected Dividends
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Stock A is expected to pay ...

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