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The Bouchard Company's EPS was $5.90 in 2019, up from $3.47 in 2014. The company pays out 40% of its earnings as dividends, and its
The Bouchard Company's EPS was $5.90 in 2019, up from $3.47 in 2014. The company pays out 40% of its earnings as dividends, and its common stock sells for $32.00.
- Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places.
- The last dividend was D0= 0.40($5.90) = $2.36. Calculate the next expected dividend, D1, assuming that the past growth rate continues. Do not round intermediate calculations. Round your answer to the nearest cent.
- What is Bouchard's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places.
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