Otobai Motor Company Is Currently Paying a Dividend of $1

question 56

Multiple Choice

Otobai Motor Company is currently paying a dividend of $1.40 per year. The dividends are expected to grow at a rate of 18% for the next three years and then a constant rate of 5% thereafter. What is the expected dividend per share in year 5?

• A) $2.35
• B) $2.54
• C) $2.91
• D) $1.50

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