Four years ago, Bling Diamond, Inc., paid a dividend of $1.73 per share. The firm paid a dividend of $2.36 per share yesterday. Dividends will grow over the next five years at the same rate they grew over the last four years. Thereafter, dividends will grow at 5% per year. What will the firm’s cash dividend be in seven years?

$2.90 approx

Explanation:

The computation of firm’s cash dividend be in seven years

First we need to find out the

Growth Rate = (Last Dividend ÷ Dividend 4 years ago)^(1 ÷ 4) - 1

= ($2.36 ÷ $1.73)^(1 ÷ 4) - 1

= $1.36^0.35 - 1

=  1.113624092  - 1

= 0.113624092

= 11.36%

Now we calculate for 5 years

Dividend in 5 years = $2.36 × 1.113624092

= $2.628

and Dividend in 7 Years = Dividend in 5 years × (1 + 5%)^2

= $2.628 × 1.05^2

= $2.628 × 1.1025

= $2.90 approx

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

answer///supply is elastic, and demand is inelastic;