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Average growth rate

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Average growth rate

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  • August 31, 2022 at 4:25 pm #664762
    Anonymous
    Inactive
    • Topics: 5
    • Replies: 6
    • ☆

    Mr Moffat, what is the formula to calculate growth rate over a few years?

    September 1, 2022 at 7:51 am #664800
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54665
    • ☆☆☆☆☆

    I will give it by example rather than as a formula – this is not a ‘formula learning’ exam.

    If dividends in 2016 were $200 and in 2020 were $250 then the average rate of growth is (the 4th root of 250/200) – 1 = 0.0574 or 5.74%

    I do explain this in my free lectures!!

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