Calculate the arithmetic average of dividend growth

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Reference no: EM132419876

1. ExxonMobil Corporation has paid the following dividends per share:

2014: $2.76

2015: $2.92

2016: $3.00

2017: $3.08

2018: $3.28

2019: $3.48

A. Calculate the arithmetic average of dividend growth using the five years of increases.

B. Calculate the geometric average of dividend growth for 5 years (2014 base year to 2019)

C. Calculate the expected stock price using the arithmetic average. Assume a discount rate of 10%

D. Calculate the expected stock price using the geometric average and the same discount rate.

E. State the stock price of ExxonMobil Corporation at the end of trading on 11/5/19 and indicate which estimate (C. or D.) is closer to the price

Reference no: EM132419876

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