{"id":205301,"date":"2025-03-24T10:19:47","date_gmt":"2025-03-24T10:19:47","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=205301"},"modified":"2025-03-24T10:19:49","modified_gmt":"2025-03-24T10:19:49","slug":"highway-express-has-paid-annual-dividends-of-1-32-1-33-1-38-1-40-and-1-42-over-the-past-five-years-respectively","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/03\/24\/highway-express-has-paid-annual-dividends-of-1-32-1-33-1-38-1-40-and-1-42-over-the-past-five-years-respectively\/","title":{"rendered":"Highway Express has paid annual dividends of $1.32, $1.33, $1.38, $1.40, and $1.42 over the past five years, respectively"},"content":{"rendered":"\n<p>Highway Express has paid annual dividends of $1.32, $1.33, $1.38, $1.40, and $1.42 over the past five years, respectively. What is the average dividend growth rate?<\/p>\n\n\n\n<p>Multiple Choice<\/p>\n\n\n\n<p>2.39 percent<br>2.47 percent<br>1.85 percent<br>1.98 percent<br>2.16 percent<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/learnexams.com\/blog\/wp-content\/uploads\/2025\/03\/image-1264.png\" alt=\"\" class=\"wp-image-205302\"\/><\/figure>\n\n\n\n<p>To determine the average dividend growth rate for Highway Express over the past five years, we can apply the Compound Annual Growth Rate (CAGR) formula. This method provides a consistent rate at which dividends have grown annually over the period, smoothing out fluctuations.<\/p>\n\n\n\n<p><strong>Step 1: Understand the CAGR Formula<\/strong><\/p>\n\n\n\n<p>The CAGR formula is expressed as:\ue206<\/p>\n\n\n\n<p>[ \\text{CAGR} = \\left( \\frac{\\text{Ending Value}}{\\text{Beginning Value}} \\right)^{\\frac{1}{n}} &#8211; 1 ]<\/p>\n\n\n\n<p>Where:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Ending Value<\/strong> is the dividend at the end of the period.<\/li>\n\n\n\n<li><strong>Beginning Value<\/strong> is the dividend at the start of the period.<\/li>\n\n\n\n<li><strong>n<\/strong> is the number of years over which the growth occurs.<\/li>\n<\/ul>\n\n\n\n<p><strong>Step 2: Apply the Given Data<\/strong><\/p>\n\n\n\n<p>The dividends over the past five years are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Year 1: $1.32<\/li>\n\n\n\n<li>Year 2: $1.33<\/li>\n\n\n\n<li>Year 3: $1.38<\/li>\n\n\n\n<li>Year 4: $1.40<\/li>\n\n\n\n<li>Year 5: $1.42<\/li>\n<\/ul>\n\n\n\n<p>Here, the Beginning Value is $1.32 (Year 1 dividend), and the Ending Value is $1.42 (Year 5 dividend). The number of years (n) is 4, as the growth occurs over four intervals between the five data points.<\/p>\n\n\n\n<p><strong>Step 3: Calculate the CAGR<\/strong><\/p>\n\n\n\n<p>Using the CAGR formula:\ue206<\/p>\n\n\n\n<p>[ \\text{CAGR} = \\left( \\frac{1.42}{1.32} \\right)^{\\frac{1}{4}} &#8211; 1 ]<\/p>\n\n\n\n<p>First, calculate the ratio:<\/p>\n\n\n\n<p>[ \\frac{1.42}{1.32} \\approx 1.07576 ]<\/p>\n\n\n\n<p>Then, raise this ratio to the power of ( \\frac{1}{4} ):<\/p>\n\n\n\n<p>[ 1.07576^{0.25} \\approx 1.0185 ]<\/p>\n\n\n\n<p>Subtract 1 to find the growth rate:<\/p>\n\n\n\n<p>[ 1.0185 &#8211; 1 = 0.0185 ]<\/p>\n\n\n\n<p>Convert this decimal to a percentage:<\/p>\n\n\n\n<p>[ 0.0185 \\times 100 = 1.85\\% ]<\/p>\n\n\n\n<p><strong>Conclusion<\/strong><\/p>\n\n\n\n<p>The average annual dividend growth rate for Highway Express over the past five years is approximately <strong>1.85%<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Highway Express has paid annual dividends of $1.32, $1.33, $1.38, $1.40, and $1.42 over the past five years, respectively. What is the average dividend growth rate? Multiple Choice 2.39 percent2.47 percent1.85 percent1.98 percent2.16 percent The correct answer and explanation is : To determine the average dividend growth rate for Highway Express over the past five [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-205301","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/205301","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=205301"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/205301\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=205301"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=205301"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=205301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}