If these companies continue these policies at the same rates and continue to earn 10 % of their
value during Year 2,
investors holding shares of ABC will see even
greater dividend payouts, earning $ 10.50 per share ($ 1.05 B x 10 %
= $ 105M, $ 105M / 2
= $ 52.5 M, $ 52.5 M / 5M
= $ 10.50) at the end of Year 2 for a dividend yield of 10.5 %.
Source: Income
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