Walgreen Company reported the following earnings per share from 1989 to 1994.
|
Year |
EPS |
|
1989 |
$1.28 |
|
1990 |
$1.42 |
|
1991 |
$1.58 |
|
1992 |
$1.78 |
|
1993 |
$1.98 |
|
1994 |
$2.30 |
a. Estimatethearithmetic average and geometric average growthratein earningspershare between 1989 and 1994. Why are they different? Which is more reliable?
b. Estimate the growth rate using a linear growth model.
c. Estimate the growth rate using a log-linear growth model.