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9. Greenwell Companys EPS was $7.10 in 1999 and $4.20 in 1994.The company pays out 40% of its earnings as dividends, and the stock sells
9. Greenwell Companys EPS was $7.10 in 1999 and $4.20 in 1994.The company pays out 40% of its earnings as dividends, and the stock sells for $44. 1) Calculate the past growth earnings, 2) Calculate the next expected dividends per share, D1. (D0 = 0.40($7.10) = $2.84). Assume that the past growth rate will continue. 3) What is the cost of retained earnings, rr, for Greenwell Company?
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