Question

g Last year Thomson Inc's earnings per share (EPS) were $3.50, and its growth rate during the prior 5 years was 6.6% per year. If that growth rate were maintained, how many years would it take for Thomson's EPS to triple

Answer 1

17.19 years

Step-by-step explanation:

The triple value of the earnings per share=$3.50*3=$10.50

The growth rate is 6.6%

Using the nper formula in excel, we can determine the number of years earnings per share would triple

=nper(rate,pmt,-pv,fv)

rate is 6.6%

pmt is not applicable to the scenario ,hence it is zero

pv is the current earnings per share

fv is the future earnings per share

=nper(6.6%,0,-3.5,10.5)= 17.19