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Rick's Department Stores has had the following pattern of earnings per share over the last five years: Earnings per share $ 9.00 Year 20XU
Rick's Department Stores has had the following pattern of earnings per share over the last five years: Earnings per share $ 9.00 Year 20XU 20XV 9.54 20XW 10.11 20XX 20XY 10.72 11.36 13 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 (20XZ). (Do not round intermediate calculations. Round the final answers to 2 decimal places.) Earnings Dividend 20XZ b. If the required rate of return is 13 percent, what is the anticipated share price at the beginning of 20XZ? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Anticipated stock price $
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a To project earnings and dividends for the next year 20XZ we first need to calculate the growth rat...Get Instant Access to Expert-Tailored Solutions
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