Jeffrey Williams Blog Post #2
2/10/15
a. Dividends Chevron paid to shareholders from 2000 to 2005.
b. In this experiment, dividends are dependent on the year.
c.
| Time (Years) | Dividend |
| 2000 | $1.30 |
| 2001 | $1.35 |
| 2002 | $1.40 |
| 2003 | $1.44 |
| 2004 | $1.56 |
| 2005 | $1.75 |
| d. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
e.
The average rate of change (ARC) for the three secant lines below are:
(2000, 1.30) & (2003, 1.44) = .14/3 = .0467 $/yr.
(2001, 1.35) & (2003, 1.44) = .09/2 = .045 $/yr.
(2001, 1.35) & (2003, 1.44) = .09/2 = .045 $/yr.
(2002, 1.40) & (2003, 1.44) = .4/1 = .4 $/yr.
(2003, 1.44) & (2004, 1.56) = .12/1=.12 $/yr.
(2003, 1.44) & (2005, 1.75) = .31/2 = .155 $/yr.
The ARC of the secant lines increases as the other endpoints get closer to 2003. This means that as time progresses Chevron has been increasing there dividend payments by a larger percent each year.
f.
g. 1.44 - 1.38/ 2003 - 2002 = .6/1 = .6 $/yr.
This calculation means that from the year 2002 to 2003, the dividend paid by Chevron to its stockholders increased by 60 cents. Mathematically, this number i means that the rate of change at 2003 is approximately .6 $/yr.
h. I know that the value from part g is an approximate IRC from 2003 since the secant line from 2002 to 2003 is .4 $/yr. While the two numbers due are not the same, it is important to remember that the tangent line in this case is an approximation which means that the results will not be the same as a perfect secant line. However, I can say that the IRC is around .6 $/yr. since the y-value for the original function when x = 2002 is 1.40 and, on the tangent line, the y-value is 1.38; this small discrepancy in the y-value is the reason for the two differing rates of change, and why .6 $/yr is not far off for an approximation.
Jeffrey, I really liked your real-life application of Chevron's payment to shareholders. It's interesting how Chevron has been increasing their percentage dividend payments each year, regardless of the economy's current state.
ReplyDeleteI'm surprised at how shallow the growth of the curve is in your graph but even so there still is a tangent line! It's very cool how you used business information and applied it to our learning!
ReplyDeleteJeff;
ReplyDeleteI believe that is always good idea to use real life examples, especially when it comes to profit and gains. I enjoyed reading your post and I know I gained some useful information from it. Thanks.
Jeff,
ReplyDeleteThis was a great application into the course. The graph wasn't steep at all. Also, it is very relevant information in the way you chose to analyze information about shareholders.
jeffrey,
ReplyDeletenice job! and a really interesting and relevant post! your graphs and table are well organized and easy to understand. i like that that you calculated secant lines on each side of the point t = 2003, so you could see what is happening on both sides and really get the idea of zooming in. your final explanation at the end is spot on and detailed and i can tell that you understand the meaning of IRC.
good job!
professor little