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Company Qs current return on equity (ROE) is 12%. It pays out earnings as cash dividends using a payout ratio of 0.40. Current book value

Company Qs current return on equity (ROE) is 12%. It pays out earnings as cash dividends using a payout ratio of 0.40. Current book value per share is $59. Book value per share will grow as Q reinvests earnings.

Assume that the ROE and payout ratio stay constant for the next four years. After that, competition forces ROE down to 10.5% and the payout ratio increases to 0.75. The cost of capital is 10.5%.

a.

What are Qs EPS and dividends in years 1, 2, 3, 4, and 5? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Year EPS Dividends
1 $ $
2 $ $
3 $ $
4 $ $
5 $ $

b.

What is Qs stock worth per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Stock worth per share $

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