A company is just about to pay dividend of 50 cents. Four years ago its dividend was 28 cents. What was the average annual growth over four years?

Step 1. The most recent dividend, d4, is 50cents

Step 2 The historic dividend, do, is 28cents

Step 3 applying the formula 28 x (1+g)1/4 =50cents or rearranging

1+g=(50/28)1/4 = (1.7857)1/4 = 1.15598

g=15.6%

Company Paid now% , whereas four year ago%, so if Four year back it was2.8 on a share of and now it5.0, which makes it2.2 as growth.

So as per static growth5-2.8 =2.2/2.8/4  =. % per Year.

On Cumulative or Cyclic growth in First three years it is% and in last year%.

 

i'd like to join even if i'm wrong and waiting for correct answer but i think it should be 50 cent / 28 cent / 4 years = 44.6% average growth /year , as i get from question and i quot "dividend of 50 cent" for each share not 50 per cent for each year , ^_^ thanks for the great question Frank 

Company now paid 50 % dividend. Four year ago paid 28 % dividend Growth for four years dividend =50-28 = 22 %, Average growth annually =22/4=5.5 %