Josh purchased 100 shares of XOM at the beginning of 2011.He received dividends per share of $1.37 (2011), $1.55 (2012), $1.66 (2013), $1.74 (2014), $1.85 (2015).At the end of 2015, just after receiving the last dividend, he sold the stock for $84.76.At what rate did the dividends grow from the end of 2011 to the end of 2015? Assume that all dividends were received at the end of the year.
A)7.8%
B)6.2%
C)13.1%
D)35%

Question

Quizplus · Accepted Answer

The dividends grew at a rate of 7.8% from the end of 2011 to the end of 2015. This can be calculated using the following formula:Dividend growth rate = (Ending dividend / Beginning dividend) ^ (1 / Number of years) - 1In this case, the beginning dividend is $1.37 and the ending dividend is $1.85. The number of years is 5.Therefore, the dividend growth rate is:($1.85 / $1.37) ^ (1 / 5) - 1 = 7.8%

Josh Purchased 100 Shares of XOM at the Beginning of 2011.He