Approximately What Interest Rate Is Needed to Double an Investment

question 30

Multiple Choice

Approximately what interest rate is needed to double an investment over eight years?

• A) 8 percent
• B) 9 percent
• C) 12 percent
• D) 100 percent

---

Definitions:

Cash Dividends

Profits given to stockholders by a corporation, typically as a way to distribute earnings.

New Shares

Additional stock issued by a company, potentially diluting the ownership percentage of existing shareholders.

Dividend Income

Earnings obtained by holding company shares, typically dispensed from the firm's earnings.

Optimal Dividend Policy

The best strategy a company can adopt for the payment of dividends, balancing between retaining earnings for growth and satisfying shareholders.