Calculate the amount of the next annual dividend


Problem:

Northwest, Inc. stock is selling for $40.59 a share based on a 10 percent rate of return.

Required:

Question: Calculate the amount of the next annual dividend (i.e. D1) if the dividends are increasing by 5 percent annually.

Note: Please provide equation and explain comprehensively and give step by step solution.

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Accounting Basics: Calculate the amount of the next annual dividend
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