Select a publicly traded company that pays dividend. Go to www.yahoofinance.com and download the dividend data for the selected company and one of its competitors’ stock for the last 10 years (2012-2022). Use Excel to calculate annual dividends and the annual growth rate in dividends for the two companies. Questions: 1. Based on historical growth rates in dividend, will the forecasted growth in dividend be constant or non-constant? Explain.
Select a publicly traded company that pays dividend. Go to www.yahoofinance.com and download the dividend data for the selected company and one of its competitors’ stock for the last 10 years (2012-2022). Use Excel to calculate annual dividends and the annual growth rate in dividends for the two companies. Questions: 1. Based on historical growth rates in dividend, will the forecasted growth in dividend be constant or non-constant? Explain.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Select a publicly traded company that pays dividend. Go to www.yahoofinance.com and download the dividend data for the selected company and one of its competitors’ stock for the last 10 years (2012-2022). Use Excel to calculate annual dividends and the annual growth rate in dividends for the two companies.
Questions:
1. Based on historical growth rates in dividend, will the
Transcribed Image Text:### Dividend Growth Rate Analysis (2012-2022)
The following table provides a detailed breakdown of dividends paid over various dates from 2012 to 2022, along with the annual growth rate percentages. This information is essential for understanding the growth in dividends over the years and can be beneficial for making informed investment decisions.
#### Table: Dividends and Annual Growth Rate
| Date | Dividends | Year | Total Dividends | Growth Rate % |
|------------|-----------|------|-----------------|---------------|
| 3/1/12 | 0.163 | | | |
| 6/13/12 | 0.213 | | | |
| 9/12/12 | 0.213 | | | |
| 12/7/12 | 0.213 | 2012 | 0.802 | |
| 3/13/13 | 0.212 | | | |
| 6/13/13 | 0.28 | | | |
| 9/11/13 | 0.28 | | | |
| 12/4/13 | 0.28 | 2013 | 1.052 | 31.17 |
| 3/12/14 | 0.28 | | | |
| 6/11/14 | 0.375 | | | |
| 9/10/14 | 0.375 | | | |
| 12/3/14 | 0.375 | 2014 | 1.405 | 33.56 |
| 3/11/15 | 0.375 | | | |
| 6/11/15 | 0.5 | | | |
| 9/9/15 | 0.5 | | | |
| 12/2/15 | 0.5 | 2015 | 1.875 | 33.45 |
| 3/9/16 | 0.5 | | | |
|
Transcribed Image Text:### Dividend Growth Rate Analysis
#### Overview
The provided table documents the dividend payouts and their corresponding growth rates over a span of 11 years, from 2012 to 2022. The data examines the yearly changes in dividends and provides the average growth rate over this period.
#### Data Summary
| **Date** | **Dividends** | **Growth Rate %** |
|----------|---------------|-------------------|
| 3/8/12 | 0.04 | - |
| 3/8/13 | 0.04 | 0.00% |
| 3/10/14 | 0.04 | 0.00% |
| 3/10/15 | 0.04 | 0.00% |
| 3/9/16 | 0.04 | 0.00% |
| 3/8/17 | 0.04 | 0.00% |
| 3/9/18 | 0.04 | 0.00% |
| 3/8/19 | 0.04 | 0.00% |
| 3/9/20 | 0.04 | 0.00% |
| 3/9/21 | 1 | 2400.00% |
| 6/7/21 | 1 | 0.00% |
| 9/7/21 | 1 | 0.00% |
| 12/6/21 | 1 | 0.00% |
| 3/8/22 | 1.12 | 12.00% |
| **Average** | - | **185.54%** |
#### Key Insights
1. **Stable Dividends (2012-2020)**:
- From 2012 through 2020, the dividend remained constant at 0.04 with no growth. This indicates a period of stagnant dividend policies without any increase or decrease.
2. **Significant Increase in 2021**:
- On 3/9/21, the dividend sharply increased from 0.04 to 1, marking a substantial growth rate of 2400%.
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Please explain the rationale why "There is no constant growth in dividends" in your example?
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