What Is the Implied Growth Duration of Freed Industries Given

question 116

Multiple Choice

What is the implied growth duration of Freed Industries given the following: $$\begin{array} { l c c } & \text { S\&P Industrials } & \text { Freed Industries } \\\hline \text { P/E Ratios } & 19 & 22 \\\text { Average Growth (\%) } & 11.0 & 16.0 \\\text { Dividend Yield } & .033 & .08\end{array}$$

• A)1.8 years
• B)1.3 years
• C)5.0 years
• D)4.5 years
• E)3.5 years

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Definitions:

Marginal Cost

The cost associated with producing one additional unit of a product, emphasizing the incremental expense in production processes.

Additional Unit

The next unit of product or service that is being considered for production or consumption.

Marginal Cost

Incremental expense incurred from the production of one additional unit of a good.

Average Total Cost

The total costs of production divided by the total output, indicating the average cost per unit of output.