The current value of a company is $25 million. If the value of the company six...

The current value of a company is $25 million. If the value of the company six years ago was $9 million, what is the company’s mean annual growth rate over the past six years (to decimal)?

Expert Solution

Compound Annual Growth Rate={ [(V final)/(V begin)]^1/t }-1

V final = final value

V Begin= Beginning value

={[(25)/(9)]^1/6}-1

=1.1856311015-1 =0.1856311015

CAGR or COMPOUND ANNUAL GROWTH RATE is the mean annual growth over a period of time of an investment. The period will ne longer than one year.

jeff jeffy answered 2 years ago

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