Sellers 1v'vants to Buy {Medium} Mark Sellers, a hedge fund manager with Sellers Capital in Chicago, wrote a piece in the Financial Times on September 9, 2006, arguing that Home Depot, the warehouse retailer, was worth $50 per share, Home Depot traded at 534 per share at the time. Analysts were forecasting a consensus $2.98 earnings per share for fiscal year 200?r and $3.26 for 2008. A forward dividend of $060 per share was indicated for 200? and $030 for 2008, with the dividend payout ratio maintained at the 2008 level in subsequent years. Home Depot re- ported a book value of $26,909 million for scal year ending January 2006, with 2,124 shares outstanding, Use a required return of 10 percent per year in answering the following questions: a. Given the analysts' forecasts, what is the growth rate for residual earnings after 2008 that is implied by Ms Sellers's $50 valuation? b, What are the eamingspershare growth rates for 2009 and 2010 that are implied by Mr. Sellers's $50 valuation