Question

Find the average annual growth rate of the dividends for each firm listed in the following table ! i Data Table (Click on the following icon Farm Loewen Morse Huddleston Meyer 2006 $1.01 $1.12 $1.75 $2.25 in order to copy its contents into a spreadsheet.) Dividend Payment per Year 2007 2008 2009 2010 $1.06 $1.30 $1.21 $1.27 $0.90 $0.70 $1.20 $1.20 $2.00 $3.60 $3.90 $4.00 $2.20 $2.10 $2.75 $2.85 2011 $1.30 $1.35 $4.50 $2.99 Print Done

Answer 1

a. Loewen growth rate is computed as follows:

= ( $ 1.30 / $ 1.01 )^1/5 - 1

= 5.18% Approximately

Morse growth rate is computed as follows:

= ( $ 1.35 / $ 1.12 )^1/5 - 1

= 3.81% Approximately

Huddleston growth rate is computed as follows:

= ( $ 4.50 / $ 1.75 )^1/5 - 1

= 20.79% Approximately

Meyer growth rate is computed as follows:

= ( $ 2.99 / $ 2.25 )^1/5 - 1

= 5.85% Approximately

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