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Sir, There is a question with the following information:
Year 20X6 20X2
Dividend/share 7.1c 4.2c
Earnings/share 41.3c 31.6c
we have to calculate the annual growth in each of them.The answer calculates annual growth in dividends as (7.1/4.2)^0.25
I don’t understand where is this 0.25 coming from?
Please explain me^0.25 (or ^(1/4) ) is a way of typing 4th root.
As to why we need the fourth root is explained in my free lectures 🙂
is that from chapter 2? I didn’t see that kind of question anywhere neither it was explained in the lecture, do I recheck?
No – it is explained in the free lectures on Chapter 17.
The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.
We take the 4th root because there are 4 years. Please watch the free lectures!
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