Ten years ago, Levin Inc. earned $0.50 per share. Its earnings this year were $2.20. What was the growth rate in Levin's earnings per share (EPS) over the 10-year period?
15.97%
To calculate the growth rate in Levin Inc.'s earnings per share (EPS) over the 10-year period, you can use the following formula:
Growth Rate = ((Current EPS / Past EPS)^(1 / n) - 1) * 100
Where:
- Current EPS is the EPS for the current year ($2.20)
- Past EPS is the EPS from ten years ago ($0.50)
- n is the number of years (10 in this case)
Let's plug in the values and calculate the growth rate:
Growth Rate = ((2.20 / 0.50)^(1 / 10) - 1) * 100
Simplifying:
Growth Rate = (4.4^(0.1) - 1) * 100
Growth Rate = (1.3211 - 1) * 100
Growth Rate = 0.3211 * 100
Growth Rate = 32.11
Therefore, the growth rate in Levin Inc.'s earnings per share (EPS) over the 10-year period is approximately 32.11%.
To calculate the growth rate in Levin Inc.'s earnings per share (EPS) over the 10-year period, we can use the formula:
Growth Rate = ((Ending Value / Beginning Value) ^ (1 / Number of Years)) - 1
First, let's calculate the beginning value, which is the earnings per share (EPS) 10 years ago. We are given that 10 years ago, Levin Inc. earned $0.50 per share.
Beginning Value = $0.50 per share
Next, let's calculate the ending value, which is the earnings per share (EPS) of this year. We are given that this year, Levin Inc. earned $2.20 per share.
Ending Value = $2.20 per share
Now, let's calculate the growth rate using the formula above:
Growth Rate = (($2.20 per share / $0.50 per share) ^ (1 / 10 years)) - 1
Calculating (($2.20 / $0.50) ^ 0.1) - 1:
Growth Rate = (4.4 ^ 0.1) - 1
Using a calculator or software, we find that 4.4 raised to the power of 0.1 is approximately 1.18321595662.
Growth Rate = 1.18321595662 - 1
Finally, we find that the growth rate in Levin Inc.'s earnings per share (EPS) over the 10-year period is approximately 0.1832, or 18.32%.