A company just paid a dividend to its common shareholders of $7

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A company just paid a dividend to its common shareholders of $7.50 per share, so

DIV₀ = $7.50. A newly introduced product line is expected to increase dividends by

75% for the next (or upcoming) year followed by 40% during the year after next. Based

on these forecasted dividend growth rates, what will be the values of dividends for each

of the next two years (that is, find DIV₁ and DIV₂)?

 

a)Expected dividend at the end of Year 1 (DIV₁) =

b) Expected dividend at the end of Year 2 (DIV₂) =

Question 4 options)