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Radon Homes' current EPS is $7.50. It was $4.345 years ago. The company pays out 30% of its earnings as dividends, and the stock sells

image text in transcribed Radon Homes' current EPS is $7.50. It was $4.345 years ago. The company pays out 30% of its earnings as dividends, and the stock sells for $39. a. 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. % b. Calculate the next expected dividend per share, D1. (Hint: D0=0.30($7.50)=$2.25.) Assume that the past growth rate will continue. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. What is Radon's cost of equity, rs ? Do not round intermediate calculations. Round your answer to two decimal places. % Radon Homes' current EPS is $7.50. It was $4.345 years ago. The company pays out 30% of its earnings as dividends, and the stock sells for $39. a. 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. % b. Calculate the next expected dividend per share, D1. (Hint: D0=0.30($7.50)=$2.25.) Assume that the past growth rate will continue. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. What is Radon's cost of equity, rs ? Do not round intermediate calculations. Round your answer to two decimal places. %

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