A Firm Has Paid Annual Dividends of $1

question 67

Multiple Choice

A firm has paid annual dividends of $1.32,$1.43,$1.55,$1.62,$1.64,and $1.70 per share over the past 6 years,respectively.What is the geometric average growth rate for these dividends?

• A)5.19 percent
• B)5.28 percent
• C)5.48 percent
• D)5.57 percent
• E)5.74 percent

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Definitions:

Net Income

The total profit of a company after subtracting all expenses from revenues, also known as the bottom line.

Limited Life

The concept that an asset or an entity has a finite existence or operational period before it ceases to be useful or exist.

Corporation

A legal entity that is separate and distinct from its owners, providing them with limited liability, and is permitted to own assets, incur liabilities, and sell securities, among other rights.

Partnership

A legitimate business model involving collaboration between two or more people in managing and dividing earnings.