In a Stream of Past Dividends,the Initial Dividend Is $0

question 39

Multiple Choice

In a stream of past dividends,the initial dividend is $0.75 and the most recent dividend is $1.25.The number of years between these two dividends (n) is 8 years.What is the average growth rate during this eight-year period? Use a calculator to determine your answer.

• A)6.59%
• B)6.62%
• C)6.69%
• D)6.72%

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Definitions:

Rack Jobber

A company or individual who provides and stocks merchandise in stores, typically in specialty areas, and shares profits with the retailer or pays for shelf space.

Limited-Function Merchant Wholesaler

A wholesaler that offers a narrower range of services than full-service wholesalers, typically specializing in only certain kinds of products or functions.

Merchant Wholesaler

A type of intermediary that buys goods in bulk from manufacturers or producers and sells them in smaller quantities to retailers or other businesses.

Warehouse Club

A membership-based retail store offering a wide variety of merchandise, often in bulk and at lower prices than conventional retailers.