The Bouchard Company's EPS was $5.40 in 2021, up from $3.26 in 2016. The company pays out 40% of its earnings as dividends, and its common stock sells for $30.00. a. Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places. % b. The last dividend was Do = 0.40($5.40) = $2.16. Calculate the next expected dividend, D₁, assuming that the past growth rate continues. Do not round intermediate calculations. Round your answ to the nearest cent. 2.39 $ c. What is Bouchard's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places. %

The Bouchard Company's EPS was $5.40 in 2021, up from $3.26 in 2016. The company pays out 40% of its earnings as dividends, and its common stock sells for $30.00. a. Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places. % b. The last dividend was Do = 0.40($5.40) = $2.16. Calculate the next expected dividend, D₁, assuming that the past growth rate continues. Do not round intermediate calculations. Round your answ to the nearest cent. 2.39 $ c. What is Bouchard's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places. %

Name: The Bouchard Company's EPS was $5.40 in 2021, up from $3.26 in 2016.
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Description: The Bouchard Company's EPS was $5.40 in 2021, up from $3.26 in 2016. The company pays out 40% of its earnings as dividends, and its common stock sells for $30.00.a. Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 4P

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