Question

The dividends per share paid by Artisan Industries Inc.​ (AI) doubled from a starting value of​ $1.50 in 2010 to a value of​ $3.00 in 2016​ (a

sixminus−year

​period). What was the approximate average annual rate of growth of​ AI's dividends per​ share? Use the Rule of 72 to determine your answer.

A.

​FFF's dividends grew at an annual rate of approximately​ 12% per year.

B.

​FFF's dividends grew at an annual rate of approximately​ 10% per year.

C.

​FFF's dividends grew at an annual rate of approximately​ 8% per year.

D.

​FFF's dividends grew at an annual rate of approximately​ 6% per year.

Answer 1

Answer:- Option A - FFF's dividends grew at an annual rate of approximately​ 12% per year.

( Explanation:- According to Rule of 72, if one has to find out that in how many years the money will get doubled at a given interest rate, then one can divide the 72 by that interest rate. So, in this case money is getting doubled in 6 years, so 72 must be divided by a number that gives the answer as 6. So if divide 72 by 12 then we get answer as 6. So, we can say that FFF's dividends grew at an annual rate of approximately​ 12% per year.)