If a firm's dividend has grown from $1 to $2 in ten years,the annual rate of growth is 10 percent.

Name: If a firm's dividend has grown from $1 to $2 in ten years,the annual rate of growth is 10 percent.
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Question

Quizplus · Accepted Answer

The calculation for annual rate of growth is (Ending dividend/Beginning dividend)^(1/number of years) - 1. Using this formula, the annual rate of growth for the given scenario would be (2/1)^(1/10) - 1 = 7.18%. Therefore, the statement is false.

If a Firm's Dividend Has Grown from $1 to $2