Correct computation of the dividend for year

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Reference no: EM131891813

Faruk’s Jabukovaca Inc just paid an annual dividend of $1.17 a share. The firm expects to increase this dividend by 5 percent per year the following three years and then decrease the dividend growth to 2 percent annually thereafter. Which one of the following is the correct computation of the dividend for year 8?

A. ($1.17) (1.05 × 3) (1.02 × 4)

B. ($1.10) (1.08 × 3) (1.02 × 3)

C. ($1.10) (1.08)^3 (1.02)^4

D. ($1.17) (1.05)^3 (1.02)^5

E. ($1.17) (1.05)^3 (1.02)^3

Reference no: EM131891813

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