Calculate the annual average growth rate in dividend payable

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X is financed by 450,000 equity shares (nominal value of £1) and £250,000 fixed rate 13% debentures. The company distributes 27% of all available profits annually as dividend.

Profit before interest for the year year period for which debentures are repaid are ; year 1 = 210,000 year 2= 215,000 year 3 = 225,000.

The debentures are to be repaid by a series of equal annual payments( including principal and interest) over 3years . Annual payments to be paid at the end of each of the 3 years. Corporation tax is 21%.

Problem 1: Calculate the annual average growth rate in dividend payable by X over the 3 year period

Reference no: EM132760127

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