Calculate the next expected dividend per share

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Reference no: EM132036852

Cost of Equity Radon Homes' current EPS is $7.20. It was $4.46 5 years ago. The company pays out 60% of its earnings as dividends, and the stock sells for $34. Calculate the historical growth rate in earnings.

(Hint: This is a 5-year growth period.) Do not round intermediate calculations. Round your answer to two decimal places. %

Calculate the next expected dividend per share, D1. (Hint: D0 = 0.60($7.20) = $4.32.) Assume that the past growth rate will continue. Do not round intermediate calculations. Round your answer to the nearest cent. $

What is Radon's cost of equity, rs? Do not round intermediate calculations. Round your answer to two decimal places. %

Reference no: EM132036852

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