Question

What is the implied growth duration of Freed Industries given the following scenario?

a) 5 years
b) 10 years
c) 15 years
d) 20 years

Answer 1

To calculate the implied growth duration of Freed Industries in different scenarios, use the formula: t = log(10) / log(1 + r), where t is the number of years and r is the growth rate.

Step-by-step explanation:

The implied growth duration of Freed Industries can be calculated using the formula: t = log(10) / log(1 + r), where t is the number of years and r is the growth rate.

1. For a 5-year implied growth duration, we can calculate the growth rate as: r = (10^(1/5) - 1).
2. Similarly, for a 10-year implied growth duration: r = (10^(1/10) - 1).
3. For a 15-year implied growth duration: r = (10^(1/15) - 1).
4. And for a 20-year implied growth duration: r = (10^(1/20) - 1).

By plugging in the values for each scenario, we can calculate the respective growth rates.