Question

find the average annual growth rate of the dividends for each firm listed in the following table.
firm.     2006.   2007.   2008.   2009.   2010.    2011
loewen $1.00 $1.05. $1.10. $1.20 $1.25.    $1.30
Morse.   $1.00. $0.90. $0.80. $1.10. $1.20.   $1.35
huddle. $1.00 $2.00. $3.50. $3.75. $3.80.   $4.25
meyer.    $2.00. $2.00. $2.00. $2.70. $2.80. $2.90

Answer 1

Loewen
2006   2007     2008     2009    2010      2011
$1.00 $1.05   $1.10   $1.20     $1.25     $1.30

Annual growth rate from 2006 to 2007=($1.05-$1.00)/$1.00=5.00%
Annual growth rate from 2007 to 2008=($1.10-$1.05)/$1.05=4.7619%
Annual growth rate from 2008 to 2009=($1.20-$1.10)/$1.10=9.0909%
Annual growth rate from 2009 to 2010=($1.25-$1.20)/$1.20=4.16666%
Annual growth rate from 2010 to 2011=($1.30-$1.25)/$1.25=4.00%

Average annual growth rate= Total value of the observations/Number of observations
=(5.00%+4.7619%+9.0909%+4.16666%+4.00%)/5=5.4038% or 5.4% (rounded upto two decimal places)

Morse
2006    2007     2008     2009    2010      2011
$1.00   $0.90    $0.80    $1.10   $1.20     $1.35

Annual growth rate from 2006 to 2007=($0.90-$1.00)/$1.00 =-10.00%
Annual growth rate from 2007 to 2008=($0.80-$0.90)/$0.90=-11.111%
Annual growth rate from 2008 to 2009=($1.10-$0.80)/$0.80=37.50%
Annual growth rate from 2009 to 2010=($1.20-$1.10)/$1.10=9.0909%
Annual growth rate from 2010 to 2011=($1.35-$1.20)/$1.20=12.5%
Average annual growth rate= Total value of the observations/Number of observations
=(-10.00%-11.111%+37.5%+9.0909%+12.5%)/5=7.59%

Huddle
2006    2007     2008     2009    2010      2011
$1.00   $2.00    $3.50    $3.75   $3.80    $4.25

Annual growth rate from 2006 to 2007=($2.00-$1.00)/$1.00=100.00%
Annual growth rate from 2007 to 2008=($3.50-$2.00)/$2.00=75.00%
Annual growth rate from 2008 to 2009=($3.75-$3.50)/$3.50=7.14%
Annual growth rate from 2009 to 2010=($3.80-$3.75)/$3.75=1.33%
Annual growth rate from 2010 to 2011=($4.25-$3.80)/$3.80=11.84%

Average annual growth rate= Total value of the observations/Number of observations

=(100.00%+75.00%+7.14%+1.33%+11.84%)/5=39.06%

Meyer
2006    2007     2008     2009    2010      2011
$2.00   $2.00    $2.00    $2.70   $2.80     $2.90

Annual growth rate from 2006 to 2007=($2.00-$2.00)/$2.00=0%
Annual growth rate from 2007 to 2008=($2.00-$2.00)/$2.00=0%
Annual growth rate from 2008 to 2009=($2.70-$2.00)/$2.00=35%
Annual growth rate from 2009 to 2010=($2.80-$2.70)/$2.70=3.70%
Annual growth rate from 2010 to 2011=($2.90-$2.80)/$2.80=3.57%

Average annual growth rate= Total value of the observations/Number of observations

=(0%+0%+35%+3.70%+3.57%)/5=8.454%