Microsoft Corp reported earnings per share of $0.90 at the end of 2003 and $4 at

Question

Microsoft Corp reported earnings per share of $0.90 at the end of 2003 and $4 at the end of 2008. At what compound annual rate did earnings per share grow over this period Microsoft Corp reported earnings per share of $0.90 at the end of 2003 and $4 at the end of 2008. At what compound annual rate did earnings per share grow over this period Microsoft Corp reported earnings per share of $0.90 at the end of 2003 and $4 at the end of 2008. At what compound annual rate did earnings per share grow over this period

Explanation / Answer

Compounding annual rate (r):

$4 = $0.90×(1+r)^5

r = ($4÷$0.90)^(1÷5)-1

= 34.76%

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