Question

PLS ANSWER THIS TWO QUESTIONS THANKS!

P7-19 (similar to Find both the arithmetic growth rate and the geometric growth rate of the dividends for Custer's lce Cream Shoppes. Year Dividend $1.46 $2.48 $3.39 $433 $5.41 $6.33 $722 $8.06 $7.72 6.87 What is the arithmetic growth rate of the dividends for Custer's Ice Cream Shoppes? 2006 2010 2003 2004 2005 2007 2008 2009 2001 2002 % (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. Clear Al part

Answer 1

P7-19

Let Dividend in Year t be Dt

Growth of dividend = (D_t - D_t-1)/D_t-1 * 100%

Year	Dividend	Growth
2001	1.46
2002	2.48	69.86
2003	3.39	36.69
2004	4.33	27.73
2005	5.41	24.94
2006	6.33	17.01
2007	7.22	14.06
2008	8.06	11.63
2009	7.72	-4.22
2010	6.87	-11.01
	Average	20.74

Average = 20.74%

P7-14

For Loewen, Dividend in Year 2006 D₂₀₀₆ = 1.00

Dividend in Year 2011 D₂₀₁₁ = 1.30

Number of years = n = 5

Annual Growth Rate = (1 + (D₂₀₁₁-D₂₀₀₆)/D₂₀₀₆)^1/n - 1 = (1.30/1)^1/5 - 1 = 0.0539 or 5.39%