9-4: The Discounted Dividend Model

Problem 9-1 DPS calculation

Warr Corporation just paid a dividend of $3.75 a share (that is, D₀= $3.75). The dividend is expected to grow 10% a year for the next 3 years and then at 3% a year thereafter. What is the expected dividend per share for each of the next 5 years? Round your answers to two decimal places.

D₁= $ D₂= $ D₃= $ D₄= $ D₅= $