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Radon Homes' current EPS is $6.60. It was $4.72 5 years ago. The company pays out 40% of its earnings as dividends, and the stock
Radon Homes' current EPS is $6.60. It was $4.72 5 years ago. The company pays out 40% of its earnings as dividends, and the stock sells for $32.
- Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Do not round intermediate calculations. Round your answer to two decimal places. %
- Calculate the next expected dividend per share, D1. (Hint: D0 = 0.40($6.60) = $2.64.) Assume that the past growth rate will continue. Do not round intermediate calculations. Round your answer to the nearest cent. $
- What is Radon's cost of equity, rs? Do not round intermediate calculations. Round your answer to two decimal places. %
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The Economics Of Money Banking And Financial Markets
Authors: Frederic S. Mishkin
9th Edition
0321598903, 978-0321598905
