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23 May, 22:41

g Last year Thomson Inc's earnings per share (EPS) were $3.50, and its growth rate during the prior 5 years was 6.6% per year. If that growth rate were maintained, how many years would it take for Thomson's EPS to triple

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  1. 23 May, 23:07
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    17.19 years

    Explanation:

    The triple value of the earnings per share=$3.50*3=$10.50

    The growth rate is 6.6%

    Using the nper formula in excel, we can determine the number of years earnings per share would triple

    =nper (rate, pmt,-pv, fv)

    rate is 6.6%

    pmt is not applicable to the scenario, hence it is zero

    pv is the current earnings per share

    fv is the future earnings per share

    =nper (6.6%,0,-3.5,10.5) = 17.19
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