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Suppose that a firm's recent earnings per share and dividend per share are $3.20 and $2.70, respectively. Both are expected to grow at 7 percent.
Suppose that a firm's recent earnings per share and dividend per share are $3.20 and $2.70, respectively. Both are expected to grow at 7 percent. However, the firm's current P/E ratio of 28 seems high for this growth rate. The P/E ratio is expected to fall to 24 within five years. Compute the dividends over the next five years. (Do not round intermediate calculations. Round your final answer to 3 decimal places.) Years Dividends First year Second year Third year Fourth year Fifth year Compute the value oftc fie years (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
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