Calculate step by step long term growth rate

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You are an equity analyst examining a firm that is currently trading at $30/share. The consensus market estimates for EPS (Earnings Per Share) for the next two years are $3 next year and $3.25 the year after. You believe these estimates are accurate - along with the long term growth rate estimate of 3% starting today. Assume all earnings are paid out in dividends.

What is the long term growth rate from the year 2 EPS onwards with the information from above?

How do you calculate step by step long term growth rate?

Reference no: EM133074100

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