Question
The Bouchard Company's EPS was $6.50 in 2008, up from $4.42 in 2003. The company pays out 40% of its earning as dividends, and its
The Bouchard Company's EPS was $6.50 in 2008, up from $4.42 in 2003. The company pays out 40% of its earning as dividends, and its common stock sells for $36.00.
a) calculate the past growth rate in earnings. (hint: this is a 5 year growth period)
b) the last dividend was .4(6.5)=2.6. Calculate the next expected dividend, assuming that the past growth rate continues
c) what is Bouchard's cost of retained earnings?
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Introduction to Finance Markets, Investments and Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
16th edition
1119398282, 978-1-119-3211, 1119321115, 978-1119398288
