Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Bouchard Company's EPS was $ 6 . 8 0 in 2 0 2 1 , up from $ 3 . 3 4 in 2

The Bouchard Company's EPS was $6.80 in 2021, up from $3.34 in 2016. The company pays out 50% of its earnings as dividends, and its common stock sells for $30.00.
A. Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places.
%
B. The last dividend was D0=0.50($6.80)= $3.40. 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.
$
C. What is Bouchard's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places.
%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

What must you not do? What is the opposite of that?

Answered: 1 week ago

Question

How much can you spend?

Answered: 1 week ago