Cost of equity-calculate historical growth rate in earnings

Assignment Help Financial Management

Reference no: EM13805940

Cost of Equity

Radon Homes's current EPS is $6.16. It was $3.73 5 years ago. The company pays out 55% of its earnings as dividends, and the stock sells for $36.

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

Calculate the next expected dividend per share, D1 (Hint: D0 = 0.55($6.16) = $3.39). Assume that the past growth rate will continue. Round your answer to the nearest cent.

What is Radon's cost of equity, rs? Round your answer to two decimal places.

Reference no: EM13805940

Questions Cloud

Event-driven programming or command line programming : Imagine that you have a choice between using event-driven programming or command line programming to develop a computer program. Determine one (1) advantage and (1) disadvantage of using each. Select the style of programming that you prefer, and j..

What is the expected return of a portfolio : Suppose Autodesk stock has a beta of 2.16, whereas Costco stock has a beta of 0.69. If the risk-free interest rate is 4% and the expected return of the market portfolio is 10%, what is the expected return of a portfolio that consists of 60% Autodesk ..

Analyze the main issue covered in the article : Summarize the article (include all necessary background information); Identify, discuss and analyze the main issue covered in the article, making links to all secondary issues, theories and concepts;

Portfolio standard deviation : Your portfolio actually earned 6.2 percent for the year. You were expecting to earn 8.6 percent based on the CAPM formula. What is Jensen's alpha if the portfolio standard deviation is 12.1 percent and the beta is .93?

Cost of equity-calculate historical growth rate in earnings : Radon Homes's current EPS is $6.16. It was $3.73 5 years ago. The company pays out 55% of its earnings as dividends, and the stock sells for $36. Calculate the historical growth rate in earnings.

Understanding of how to write internal e-mails : At any rate, you are really excited about planning this party and know that leading this committee will be a great opportunity to show your leadership skills. Based on this scenario and your understanding of how to write internal e-mails, respond t..

Describe the election process for the house and the senate : Identify who makes up Congress and how many members. Describe the election process for the House and the Senate. Explain at least 3 sole powers of Congress.

Commonly found in a well-constructed business plan : All of the following are commonly found in a well-constructed business plan, except for: All of the following represent generic business strategies except for: Determining in which markets a firm should compete requires management to consider which o..

Communication skills that create a positive image : The secret to being a successful manager is to use good communication skills that create a positive image. What are three leadership styles? Give examples of each. Select a leadership style you feel comfortable with as an employee and explain why.

User Account

All Pages