|Author||Topic: Question on time value of money|
I had one question regarding the no. of years to be taken for a growth rate for this folling question.
you are analysing the last 5 yrs of earning per share for a company.The fig are $4.00,$4.50,$5.00,$6.00,$7.00.At what compund annual rate did the EPS grow during these years.
This the question given in the main material of CFA. I took the no.of yrs as 5 where as the solution for the question shows 4yrs. Can anyone help me in understanding this.
Advance Thanks and good day.
|4$ is period 0. As simple as that.|
So, you should use 4yrs instead of 5yrs.
hope it helps.