Compute dividends over the next five years

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Suppose that a firm’s recent earnings per share and dividend per share are $3.80 and $2.80, respectively. Both are expected to grow at 10 percent. However, the firm’s current P/E ratio of 19 seems high for this growth rate. The P/E ratio is expected to fall to 15 within five years. Compute the dividends over the next five years.

Reference no: EM131583476

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