A company paid dividends of $ 3.90 per share in 2009, and just announced that it...

Question

Question

A company paid dividends of $ 3.90 per share in 2009, and just announced that it will pay

$ 6.76 in 2016. Estimate the compound annual growth rate of the dividends.

The compound annual growth rate of the dividends is ?

business finance

Answer 1

Answer #1

Estimate the compound annual growth rate of the dividends.The compound annual growth rate of the dividends is

=((6.76/3.90)^(1/7))-1

=8.17%

the above can be the answer..

Answer 2

Similar Homework Help Questions

A company paid dividends of $2.80 per share in 2009, and just announced that it will...

A company paid dividends of $2.80 per share in 2009, and just announced that it will pay $9.55 in 2016. Estimate the compound annual growth rate of the dividends. The compound annual growth rate of the dividends is %. (Round to two decimal places.)
Lansing Markets just paid an annual dividend of $.70 per share. The firm recently announced that...

Lansing Markets just paid an annual dividend of $.70 per share. The firm recently announced that its dividends are expected to increase by 9 percent for the following 3 years and then increase at a constant annual rate of 2.60 percent. If you want to earn 10.50 percent on your investments, how much should you pay for one share of this stock today?
A company has just paid a $2 per share dividend. The dividends are expected to grow...

A company has just paid a $2 per share dividend. The dividends are expected to grow by 24% a year for 8 years. The growth rate in dividends thereafter is expected to stabilize at 4% a year. The appropriate annual discount rate for the company’s stock is 12%. a. What is the company’s current equilibrium stock price? b. What is the company’s expected stock price in 20 years?

2A. Firm ABC paid an annual dividend of $2.00 per share last year. Management just announced...

2A. Firm ABC paid an annual dividend of $2.00 per share last year. Management just announced that future dividends will increase by 2 percent annually. What is the amount of the expected dividend in year 5? /2B. Firm ABC paid an annual dividend of $2.00 per share last year. Management just announced that future dividends will increase by 5 percent annually in the first two years and 2 percent annually afterwards. What is the amount of the expected dividend in...
Johnson Bro's paid an annual dividend of $1.05 per share last month. Today the company announced...

Johnson Bro's paid an annual dividend of $1.05 per share last month. Today the company announced that future dividends will be increasing by 2.4 percent annually. If you require a 13 percent rate of return, how much are you willing to pay to purchase one of this stock today?
Michael's, Inc. just paid this morning an annual dividend of $2.50. Simultaneously, the company announced that...

Michael's, Inc. just paid this morning an annual dividend of $2.50. Simultaneously, the company announced that future dividends will be increasing by 5.40 percent per year. If you require an annual return of 9.6 percent, how much are you willing to pay to purchase one share of Michael's stock?

Tayco Corporation has just paid dividends of $3 per share. The earnings per share for...

Tayco Corporation has just paid dividends of $3 per share. The earnings per share for the company was $4. If you believe that the appropriate discount rate is 15% and the long term growth rate in dividends is 6%, and earnings is 6%, the firm’s P/E ratio is 8.33 33.33 44.44 11.11 None of the above the answer is A, why?
Mariota Corp. just paid a dividend of $3.90 per share on its stock. The dividend growth...

Mariota Corp. just paid a dividend of $3.90 per share on its stock. The dividend growth rate is expected to be 3.6 forever and investors require a return of 12.8 percent on this stock. What will the stock price be in 13 years?
Santa Klaus Toys just paid a dividend of $3.90 per share. The required return is 11.2...

Santa Klaus Toys just paid a dividend of $3.90 per share. The required return is 11.2 percent and the perpetual dividend growth rate is 3.5 percent. What price should this stock sell for five years from today?

Miller Brothers Hardware paid an annual dividend of $1.55 per share last month. Today, the company...

Miller Brothers Hardware paid an annual dividend of $1.55 per share last month. Today, the company announced that future dividends will be increasing by 3.40 percent annually. If you require a 8.7 percent rate of return, how much are you willing to pay to purchase one share of this stock today? Teder Corporation stock currently sells for $100 per share. The market requires a 12 percent return on the firm's stock. If the company maintains a constant 6 percent growth...

A company paid dividends of $ 3.90 per share in​ 2009, and just announced that it...