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Coca-Cola Ltd is currently trading at R38per share. The firm is expected to earn R3.24per share this year and to pay a year-end dividend of

Coca-Cola Ltd is currently trading at R38per share. The firm is expected to earn R3.24per share this year and to pay a year-end dividend of R2.5.

Required:

a. If investors require an 9.6% return from Coca-Cola, what is the estimated rate of growth implied?

b. If Coca-Cola reinvests earnings in projects with average returns equal to the share's expected rate of return, estimate next year's EPS. R

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