Q#1

Justin Cement Company has had the following pattern of earnings per share over the last five years: Earnings Year' per Share 26X1 $7 . 66 20x2 7 . 42 29x3 7 . 87 20x4 8 . 34 23x5 8 . 84 [ The earnings per share have grown at a constant rate (on a rounded basis) and will continue to do so in the future. Dividends represent 40 percent of earnings. a. Project earnings and dividends for the next year (20X6). (Round the growth rate to the nearest whole percent. Do not round any other intermediate calculations. Round your answers to 2 decimal places.) 20X6 Earnings Dividend b. If the required rate of return (K3) is 13 percent, what is the anticipated stock price (P0) at the beginning of 20X6? (Round the growth rate to the nearest whole percent. Do not round anv other intermediate calculations. Round vour answer to 2 decimal places.)