Dear Sir,
Could you please explain the calculation of new growth rate (7%) in appendix 3 of the answer.
The Annual dividend per share paid for 2017 and 2018 is $0.0595
Dividend per share paid for 2019 is $0.3100.
I could not get 7%.
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Lirio Co (March/June hybrid 2016)
9y ago#1The dividend in 2016 is $0.255 and in 2019 is $0.31
For 2016 to 2019 is 3 years growth, so the average growth rate per year = ( third root of (0.31/0.255) ) - 1 ) = 0.067 or approximately 7% per annum.
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