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View Full Version : Calculating the dividend growth rate


jpitt30
Dec 8, 2010, 02:28 PM
I am having an issue trying to calculate the yearly dividend growth rate. There is a total of 10 annual dividends for the following:
Year Dividend
2010 0.944 Dividend
2009 0.90 Dividend
2008 0.90 Dividend
2007 0.90 Dividend
2006 0.675 Dividend
2005 0.40 Dividend
2004 0.325 Dividend
2003 0.26 Dividend
2002 0.21 Dividend
2001 0.17 Dividend
2000 0.15 Dividend

What I need to find is the total dividend growth rate for each year starting in D0. Can someone help?

ArcSine
Dec 9, 2010, 06:18 AM
The wording of your question implies that you're looking for 10 separate, year-over-year growth rates (i.e. the growth from 2000 to 2001; from 2001 to 2002,. ) If so, use

\frac{d_n}{d_{n-1}} \ - \ 1 to get the percentage increase or decrease (in decimal form) from one year to the next. d_n, \ d_{n-1} denote the dividend for any year n, and for the immediately preceding year, respectively.

If instead you wanted an overall average growth from 2000 to 2010, that's a different matter. Check back in if so.