Calculate the past growth rate in earnings

Assignment Help Operation Management

Reference no: EM13229514

The Bouchard Company's EPS was $5.39 in 2005, up from $3.08 in 2000. The company pays out 35% of its earnings as dividends, and its common stock sells for $38.

a. Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places. 11.84

b. The last dividend was D0 = 0.35($5.39) = $1.89. Calculate the next expected dividend, D1, assuming that the past growth rate continues. Round your answer to two decimal places. 2.10

c. What is Bouchard's cost of retained earnings, rs? Round your answer to two decimal places.

Reference no: EM13229514

Questions Cloud

Explain the 20 ml of water added to the erlenmeyer flask : the 20 ml of water added to the erlenmeyer flask is to be previously boiled deionized water. Since water does absorb CO2 from the atmosphere and since CO2 dissolved in the water causes it to be slightly acidic

Estimate the cost of equity as a check : was there some other way to estimate the cost of equity as a check on the CAPM calculation?

What is the stocks required rate of return : GD inc has preferred stock outstanding that pays a dividend of $5 at the end of each year. The preferred sells for $50 a share. What is the stocks required rate of return? Show work

Explain when a glow stick is placed in a freezer : When a glow stick is placed in a freezer, its chemiluminescence lasts a significant time longer. How might this come about?

Calculate the past growth rate in earnings : The Bouchard Company's EPS was $5.39 in 2005, up from $3.08 in 2000. The company pays out 35% of its earnings as dividends, and its common stock sells for $38.

Select an organisation and evaluate this statement : Quality is a dynamic state associated with products, services, people, processes and environments that meet or exceeds customers' expectations.

Explain why must the radiation be at a longer wavelength : A particular sensitizer can absorb photons of one wavelength and release photons of a longer wavelength. Why must the radiation be at a longer wavelength

How many units must we sell to recover increased design cost : a cost to produce, P, of $4.00. If we were able to reduce this to $3.55 through greater attention in the design, and if the cost to improve the design (in NRE) is $35,000, how many units must we sell to recover the increased design cost.

What is the current yield on alaska power company bonds : Alaska Power Company issued $1,000 bonds that have an annual coupon rate of 7.5%. The present market value of the bonds is $1,125. If the bonds have 15 years remaining until maturity, what is the current yield on Alaska Power Company bonds?

User Account

All Pages