A firms dividend payments have been as follows: Year Dividend 1996 ............. $1.00 1997 .............1.05 1998 .............1.12
Question:
A firm’s dividend payments have been as follows:
Year Dividend
1996 ............. $1.00
1997 .............1.05
1998 .............1.12
1999 .............1.30
2000 .............1.30
2001............. 1.45
2002 .............1.50
2003 .............1.62
2004 .............1.70
2005 .............1.88
2006 .............2.00
Ten years have elapsed since the dividend rose from $1 at the end of 1996 to $2 at the end of 2006. You want to determine the annual rate of growth in the dividend.
a) What was the average percentage change in the dividend?
b) What was the rate of growth based on beginning and ending dividends?
c) What was the rate of growth using the regression analysis illustrated in the appendix to this chapter?
d) Does each technique give you the same rate of growth?
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
a There has been considerable variation from year to year in the percentage change in the dividend r...View the full answer
