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Calculate the historical growth rate in earnings

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Reference no: EM132734342

Problem - Radon Homes' current EPS is $6.50. It was $4.42 5 years ago. The company pays out 40% of its earnings as dividends, and the stock sells for $36.

Required -

a. Calculate the historical growth rate in earnings.

b. Calculate the next expected dividend per share, D1.

c. What is Radon's cost of equity, rs?

Reference no: EM132734342

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