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Sidman Products's common stock currently sells for $61 a share. The firm is expected to earn $6.10 per share this year and to pay
Sidman Products's common stock currently sells for $61 a share. The firm is expected to earn $6.10 per share this year and to pay a year-end dividend of $3.70, and it finances only with common equity. a. If investors require a 10% return, what is the expected growth rate? Round your answer to two decimal places. Do not round your intermediate calculations. % b. If Sidman reinvests retained earnings in projects whose average return is equal to the stock's expected rate of return, what will be next year's EPS? (Hint: g-(1- Payout ratio)ROE). Round your answer to the nearest cent. Do not round your intermediate calculations. $ per share
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