Let's say a company pays a quarterly dividend. You just collected a $1 dividend today. Over the next five years, you expect the quarterly dividend to growth to the following amounts as of the end of each annual anniversary:
After 1 year, $1.1
After 2 years, $1.15
After 3 years , $1.25
After 4 years, $1.30
After 5 years, $1.45
Assuming annual compounding, what is the compounded annual growth rate of the dividend?
Question 36 options:
A)
9%
B)
6.7%
C)
9.1%
D)
7.7%
E)
8.7%
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