Goodman Industries Year Stock Price Dividend 2013 $25.88 $1.73 2012 $22.13 $1.59
ID: 2420466 • Letter: G
Question
Goodman Industries
Year Stock Price Dividend
2013 $25.88 $1.73
2012 $22.13 $1.59
2011 $24.75 $1.50
2010 $16.13 $1.43
2009 $17.06 $1.35
2008 $11.44 $1.28
Landry Incorporated
Year Stock Price Dividend
2013 $73.13 $4.50
2012 $78.45 $4.35
2011 $73.13 $4.13
2010 $85.88 $3.75
2009 $90.00 $3.38
2008 $83.63 $3.00
Market Index:
Year Includes Dividends
2013 17495.97
2012 13178.55
2011 130919.97
2010 9651.05
2009 8403.42
2008 7058.96
3: What dividends do you expect for Goodman Industries stock over the next 3 years if you expect the dividend to grow at the rate of 5% per year for the next 3 years? In other words, calculate D1, D2, and D3. Note that D0 = $1.50.
Explanation / Answer
D1 = D0 (1 + g) where g = growth rate
= 1.50 (1 + 5%)
= $1.575
D2 = D0 (1+g)^2
= 1.50 (1+5%)^2
= 1.654
D3 = D0 (1+g)^3
= 1.50 (1+5%)^3
= 1.736
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