Synovec Corp. is experiencing rapid growth. Dividends are expected to grow at 27 percent per year during

Question:

Synovec Corp. is experiencing rapid growth. Dividends are expected to grow at 27 percent per year during the next three years, 18 percent over the following year, and then 4 percent per year indefinitely. The required return on this stock is 10 percent, and the stock currently sells for $71 per share. What is the projected dividend for the coming year?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...