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Ten years ago, Kronan Corporation earned $0.50 per share. Its earnings this year were $2.20. What was the growth rate in earnings per share (EPS) over the 10-year period?

Respuesta :

Tundexi

Answer:

The growth rate in earnings per share (EPS) is 15.97%

Explanation:

Assuming annual growth rate is r%, hence

$0.5 x (1 + r)^10 = $2.20

(1 + r)10 = $2.20 / $0.5

(1 + r)10 = $4.4

Taking 10th root at each side,

(1 + r)10 = $4.4  

[tex]\sqrt[10]{1 + r}[/tex] = [tex]\sqrt[10]{4.4}[/tex]

1+r = 1.1597

r = 1.1597 -  1

r = 0.1597

r= 15.97%

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