Blue Water Tours has paid annual dividends of $2.10,$2.12,$2.15,$2.15,and $2.22 over the past 5 years,respectively.What is the arithmetic average growth rate for these dividends?

Question

Quizplus · Accepted Answer

Annual growth rate year 1 to 2: ($2.12 − $2.10) / $2.10 = 0.0095238
Annual growth rate year 2 to 3: ($2.15 − $2.12) / $2.12 = 0.0141509
Annual growth rate year 3 to 4: ($2.15 − $2.15) / $2.15 = 0.0000000
Annual growth rate year 4 to 5: ($2.22 − $2.15) / $2.15 = 0.0325581
Arithmetic average growth rate = (0.0095238 + 0.0141509 + 0 .00 + 0.0325581 / 4) = 1.41 percent

Blue Water Tours Has Paid Annual Dividends of $2