Hacker News Reader

2.5% compounded over 16 years is exactly 48.5%, nowhere near 150.

You're right, my mistake.

But you're compounding the 2.5% only with itself. If you had reinvested the dividend back into the stock (common), the return is higher than 48.5%.

No. 1.025^16=1.48 - that's the reinvestment scenario. What you describe, no reinvestment, is just 2.5%*16=40%.