Integrated Potato Chips paid a $1 per share dividend yesterday. You expect the dividend to grow steadily at a rate of 4% per year. a. What is the expected dividend in each of the next 3 years

The expected dividend in year 3 = $1.12

Explanation:

The expected dividend is the dividend payable at a certain date in the future. To determine the value, we multiply the dividend at a certain time by the expected growth rate.

Year Workings Expected dividend

1 1 * 1.04 = 1.04

2 1.04 * 1.04 = 1.08

3 1.08 * 1.04 = 1.12

The expected dividend in year 3 = $1.12