Summarize the trend in the dividend growth rates

Reference no: EM132880119

Dividend Analysis and Preliminary Valuation

In the Section 3: Dividend Analysis and Preliminary Valuation assignment, you will compute the of the company's stock value based on historical dividend data for your company and a market-based equity rate of return. In this analysis, you will use the constant growth formula to compute two estimates of the stock price, a high-end value and a low-end value. Analysts frequently assess the stock value using a range of values, based on reasonable assumptions for a high-end and a low-end range.
Once you have calculated two stock values, you will compare the company's calculated values compared to the current market price of the stock. This comparison will help you determine if the stock is currently under-valued or over-valued, and will help you determine your recommendation of buy, hold, or sell. Analysts prepare value estimates based on historical data for the company as well as an understanding of expected future equity rates of return. It is important to understand that the constant growth formula provides an estimate of value, and analysts, like all humans, can be both right and wrong. The inputs used in the formula will greatly impact the value conclusion.

Question 1: Create a table that illustrates the annual dividends per share paid by your selected company over the past 10 years. If the company has not paid dividends for 10 years, include as many years as available.

Question 2: Summarize the trend in the dividend growth rates.

Question 3: Have the dividend growth rates increased or decreased? By how much? Has the increase or decrease been steady or varied from year to year?

Reference no: EM132880119

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