During the past 8 years, Beef Wellington Cattle Company's common stock dividends have grown from $2.00 to $3.19. Estimate the compound annual dividend growth rate over the 8-year period.

Question

Quizplus · Accepted Answer

The compound annual growth rate (CAGR) can be calculated using the formula: CAGR = (Ending Value/Beginning Value)^(1/Number of Periods) - 1. Plugging in the values: CAGR = ($3.19/$2.00)^(1/8) - 1 ≈ 0.06 or 6%.

During the Past 8 Years, Beef Wellington Cattle Company's Common