Question

Find both the arithmetic growth rate and the geometric growth rate of the dividends for Brantley's Service Centers. ​(Click on the following icon in order to copy its contents into a​ spreadsheet.) Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend ​$1.47 ​ $2.19 ​$3.49 ​ $4.45 ​ $5.67 ​$6.71 ​$7.05 ​$8.15 ​$7.52 ​$6.66 What is the arithmetic growth rate of the dividends for Brantley's Service Centers​?

Answer 1

The arithmetic growth rate of the dividends for Brantley's Service Centers​ is 18.31%.

Step-by-step explanation:

Arithmetic mean is the average of all the values under consideration. Arithmetic growth is the average of average of each year's growth rate.

Year Dividend Growth rate

2001 $1.47 0

2002 ​$2.19 ( ( $2.19 / $1.47 ) - 1 ) x 100 = 48.98%

2003 $3.49 ( ( $3.49 / $2.19 ) - 1 ) x 100 = 59.36%

2004 $4.45 ( ( $4.45 / $3.49 ) - 1 ) x 100 = 27.51%

2005 $5.67 ( ( $5.67 / $4.45 ) - 1 ) x 100 = 27.42%

2006 $6.71 ( ( $6.71 / $5.67 ) - 1 ) x 100 = 18.34%

2007 $7.05 ( ( $7.05 / $6.71 ) - 1 ) x 100 = 5.07%

2008 ​$8.15 ( ( $8.15 / $7.05 ) - 1 ) x 100 = 15.60%

2009 $7.52 ( ( $7.52 / $8.15 ) - 1 ) x 100 = -7.73%

2010 $6.66 ( ( $6.66 / $7.52 ) - 1 ) x 100 = -11.44%

Arithmetic growth rate = ( 48.98% + 59.36% + 27.51% + 27.42% + 18.34% + 5.07% + 15.60% - 7.73% - 11.44% ) / 10

Arithmetic growth rate = 18.311%