Dividend payout rate and expected growth rate

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Maynard Steel plans to pay a dividend of $2.87 this year. The company has an expected earnings growth rate of 4.3 % per year and an equity cost of capital of 9.8 %.

a. Assuming? Maynard's dividend payout rate and expected growth rate remain? constant, and Maynard does not issue or repurchase? shares, estimate? Maynard's share price. The stock price is $?

b. Suppose Maynard decides to pay a dividend of $0.95 this year and use the remaining $1.92 per share to repurchase shares. If? Maynard's total payout rate remains?constant, estimate? Maynard's share price. The stock price is $?

c. If Maynard maintains the same split between divdends and? repurchases, and the same payout? rate, as in part ?(b?), at what rate are? Maynard's dividends, earnings per? share, and share price expected to grow in the? future? The growth rate will be %?

Note?:The share price is expected to also grow at the same rate as dividends and earnings per share.

Reference no: EM131506541

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