10.14/.15

14. Problem 10.16 (Cost of Common Equity) eBook The Bouchard Company's EPS was $5.40 in 2019, up from $3.26 in 2014. The company pays out 60% of its earnings as dividends, and its common stock sells for $35.00. 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 = 0.60($5.40) = $3.24. Calculate the next expected dividend, Di, assuming that the past growth rate continues. Do not round intermediate calculations. Round your answer to the nearest cent. c. What is Bouchard's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places. 15. Problem 10.17 (Calculation of g and EPS) eBook Sidman Products's common stock currently sells for $63 a share. The firm is expected to earn $5.67 per share this year and to pay a year-end dividend of $3.20, and it finances only with common equity. a. If investors require a 9% return, what is the expected growth rate? Do not round intermediate calculations. Round your answer to two decimal places. b. If Sidman reinvests retained earnings in projects whose average return is equal to the stock's expected rate of return, what will be next year's EPS? (Hint: g = (1 - Payout ratio)ROE). Do not round intermediate calculations. Round your answer to the nearest cent. per share