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Sam's Fine Garments sells jackets and sports coats in suburban malls throughout the country. Business has been good, as Indicated by the twelve-year growth in
Sam's Fine Garments sells jackets and sports coats in suburban malls throughout the country. Business has been good, as Indicated by the twelve-year growth in earnings per share. The earnings have grown from $1.00 to $2.81. (Use a Financlal calculator to arrive at the answers.) a. Determine the compound annual rate of growth in earnings ( n=12 ). Use Appendix A. (Round the final answer to 2 decimal places.) Compound annual rate of growth % decimal places. Round the final answer to 2 decimal places.) E1$ c. Assume the dividend payout ratio is 20 percent. Compute Df (Round intermediate calculations to 2 decimal places. Round the thal answer to 2 decimal places.) D1$ d. The current price of the stock 15$16. Using the growth rate (g) from part a and D1 from part c. compute Ke (Round compound annual rate of growth to 2 decimal places. Round the ilnal answer to 2 decimal places.) Ke e. If the flotation cost is $3.00, compute the cost of new common stock (Kn ). (Round compound annual rate of growth io 2 decimal places. Round Intermedlate calculations to 2 declmal places. Round the final answer to 2 decimal places.)
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