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dear tutor
in which case do we use the square the square root and the minus 1… when
estimating the growth of dividendsand in which case do we not involve the square root?
best regards
It is only the square root when you are looking at past dividend growth over 2 years. If it is over three years you need the 3rd root, and so on.
My free lectures explain how to calculate dividend growth. The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
what about the growth for the future? say we are told that within two years the dividend will be $4.11 from the current dividend which is $4.00?
The same applies whether you are looking at past dividends or future dividends.
If it is two years then it is the square root, if it is three years then it is the 3rd root, etc..
Again, you must watch my free lectures – I cannot type out all of my lectures here 🙂
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