BUS 401 Week 3 - Assignment

The University of Arizona Global Campus BUS 401: Principles of Finance Margaret January August 2, 2021 This study source was downloaded by from CourseH on :56:59 GMT -06:00 2 Section 3: Dividend Analysis and Preliminary Valuation Part 1 Dividend Analysis Below in Table 6 you can see that Alaska Air Group paid dividends quarterly over the last eight years. Included within this chart you can see the annual growth rate. Table 6 ALK’s Annual Dividends ALK Year Dividend Per Share Annual Growth Rate 2020 $0.375 2.3% 2019 $0.35 2.3% 2018 $0.32 1.9% 2017 $0.30 1.8% 2016 $0.275 1.5% 2015 $0.20 1.1% 2014 $0.125 0.9% 2013 $0.20 1.1% Note. Adapted from StreetInsider (n.d.) For the past 7years of ALK’s financial report, the average growth rate is 2.58%. The average growth rate for the past five years is 1.96%%, while the past three years report 2.17%. For ALK, there was no change in 2020, causing the average growth to increase and decrease in the past 3 to 5 years. According to table 6, the lowest growth is in 2014 at 0.9% and the highest growth rate in 2019 and 2020 at 2.3%. The second-largest increase was in 2018 at 1.9%, making these more significant numbers help lower the annual average over eight years reduce from the negative. Based on table 6’s data on the annual dividends for ALK, I find that, as mentioned before, with travel restrictions slowly opening back up for the world that the yearly growth rate makes an increase to 3.0% annually. In my opinion, I find that with the increase of possible travel there may be more people flying. For the lowest, I believe this could drop to 1.0%, with the delta