Increase next years dividend to share

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Reference no: EM13870690

Consolidated now decides to increase next year’s dividend to $20 a share, without changing its investment or borrowing plans. Thereafter the company will revert to its policy of distributing $10 million a year. a. What will be the total present value of dividends paid each year on the new shares that the company will need to issue? b. What will be the transfer of value from the old shareholders to the new shareholders? c. Is this figure more than, less than, or the same as the extra dividend that the old shareholders will receive? More than, less than, the same

Reference no: EM13870690

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