Find arithmetic-geometric average growth rate of dividends

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Reference no: EM13812375

Annual Payout $2.65

Dividend Growth 58 yrs Since 1957

Stock price $80.64

EPS $3.97

Paid Quarterly Payout Ratio 66.8%

Stock Dividend Data Dividend Yield 3.29%

Consumer Goods Average 2.45%

Use the previous 5+ years (20 quarters, dividends are paid quarterly, but typically only change annually so you will have 4 growth rates) to find the arithmetic and geometric average growth rate of dividends. Then use the current stock price, recent dividend, and geometric growth rate to find the firm’s discount rate. Excel sheets/tables are fine to illustrate the information, but should be accompanied with written work summarizing your findings. What is the stock’s cost of equity according to the SML (CAPM) method?

Reference no: EM13812375

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