The dividends per share paid by Going Going Gone Inc. (GGG) doubled from a starting value of $1.50 in 2000 to a value of $3.00 in 2006 (a six-year period). What was the approximate average annual rate of growth of GGG's dividends per share? Use the Rule of 72 to determine your answer.
A) GGG's dividends grew at an annual rate of approximately 12% per year.
B) GGG's dividends grew at an annual rate of approximately 10% per year.
C) GGG's dividends grew at an annual rate of approximately 8% per year.
D) GGG's dividends grew at an annual rate of approximately 6% per year.

Question

Quizplus · Accepted Answer

The Rule of 72 states that to find the annual growth rate, you divide 72 by the number of years it takes for an investment to double. Here, 72 divided by 6 years equals 12%.

The Dividends Per Share Paid by Going Going Gone Inc