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In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two plans. The values represent dividends per share. Use Appendix
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two plans. The values represent dividends per share. Use Appendix B for an approacimate answer but calculate your final answer using the formula and financial calculator methods. Plan Plan B a. How much in total dividends per share will be paid under each plan over five years? (Do not round Intermediate calculations and round your answers to 2 decimal places.) Total Dividends Plan A Plan B b-1. Mr. Bright, the Vice-President of Finance, suggests that stockholders often prefer a stable dividend policy to a highly variable one. He will assume that stockholders apply a lower discount rate to dividends that are stable. The discount rate to be used for Plan A is 7 percent, the discount rate for Plan B is 11 percent. Compute the present value of future dividends. (Do not round Intermediate calculations and round your answers to 2 decimal places.) Present Value of Future Dividends PanA Puan b 2. Which plan will provide the higher present value for the future dividends? O Plan A Plan B Apple War 3300 0000 00 00 001S0011 2017 OMIDO17004002400210012 DOND E BRO 33
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