I'm trying to figure out the annual dividend growth of a company in 30 years using the current annual dividend rate, and the 5 year growth rate.

The formula is A= P(1+r)^t

The current dividend Is $1.92 and the Five year dividend is $2.3

So I took 1.92(1 + .023)^30 and got 3.79, or 3.8
Is this correct?
Thanks
-MC

2 answers

Hey MC:
if the current dividend is 1.92, and in five years it will be 2.3, the rate of growth is 1+i

2.3=1.9(growthrate)^5

take logs of each side:
log 2.3=log1.9 + 5log(growthrate)
log(2.3/1.9)=5log(GR)
log GR= 0.016594847
GR=10^above== 1.03895048

I hope I understand what you were looking for here.
Thank you very much
-MC