The dividends per share paid by Fantastically Fine Ferns Inc.(FFF)doubled from a starting value of $1.50 in 2007 to a value of $3.00 in 2013 (a six-year period).What was the approximate average annual rate of growth of FFF's dividends per share? Use the Rule of 72 to determine your answer.
A)FFF's dividends grew at an annual rate of approximately 12% per year.
B)FFF's dividends grew at an annual rate of approximately 10% per year.
C)FFF's dividends grew at an annual rate of approximately 8% per year.
D)FFF'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 approximate annual rate of growth, divide 72 by the number of years it takes for the value to double. In this case, it took 6 years for the dividends to double, so the approximate annual rate of growth is 72 / 6 = 12%.

The Dividends Per Share Paid by Fantastically Fine Ferns Inc