What is the average annual growth rate over the period

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Q1. The weighted average cost of capital for a company is 12% and the firm achieved an operating profit before interest and tax of $1.5m in the latest year. The company started the year with $20m of invested capital. What was the economic profit?

a. -$900,000

b. $2.4m

c. $3.47m

d. $900,000

Q2. The dividend paid by a company in each year over an 8-year period rises gradually from 50p in the first year of the period to 75p in the final year. What is the average annual growth rate over the period?

a. 1.5%

b. 0.95%

c. 0.55%

d. 5.2%

Reference no: EM133028018

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