calculate the growth rate, Finance Basics

Assignment Help:

The Mountain Fresh Company had earnings per share (EPS) of $6.32 in 2006 and $11.48 in 2011. The company pays out 30 percent of its earnings as dividends per share (DPS), and the company's stock price is currently $37.50 (in 2011).

(a) Calculate the growth rate in dividends (g) over this 5-year period.

Dividend Growth Rate (g) = _________________.

(b) Calculate the expected dividend per share next year (i.e., what is D1, assuming the earnings and dividends of Mountain Fresh growth at a constant rate).

Expected Dividend Next Year (D1) = __________________.

(c) Based on the information given above, what is the cost of retained earnings common equity (rs) for Mountain Fresh Company?

Cost of Retained Earnings (rs) = __________________.


Related Discussions:- calculate the growth rate

#title.ASF, Ask questioAustralian’s Speleological App Projectn #Minimum 100...

Ask questioAustralian’s Speleological App Projectn #Minimum 100 words accepted#

Finance functions, Finance Functions The functions of Financial Manage...

Finance Functions The functions of Financial Manager can broadly be split into two:  The Managerial Functions and The Routine functions. Managerial Finance Functions

Credit standards, Credit Standards A firm may follow a stringent or a ...

Credit Standards A firm may follow a stringent or a lenient credit policy. The firm subsequent of a lenient credit policy tends to sell on credit to customers on extremely lib

Benefits ordinary share capital - financing, Benefits Ordinary Share Capita...

Benefits Ordinary Share Capital - Financing Benefits of using ordinary share capital in the financing They facilitate projects particularly long-term projects since they

Maintain highest degree of accuracy, How can you maintain highest degree of...

How can you maintain highest degree of accuracy in reporting? For maintaining the highest degree of accuracy in reporting, we need to use the same chart of accounts being used

Managing financial resources, Two friends, Alan & Tim just graduated from t...

Two friends, Alan & Tim just graduated from the college. They plan to start their own business, of selling health foods for office workers. They have identified a commercial comple

Advantage of joint stock companies, Advantage of Joint Stock Companies ...

Advantage of Joint Stock Companies The company can own assets and incur liabilities on its own accord. Perpetual existence as or going to relate that allows the compan

Capital structure ratio, Capital Structure Ratio Gearing/Leverage/Capi...

Capital Structure Ratio Gearing/Leverage/Capital Structure Ratio The ratio signifies the extent whether the firm has borrowed fixed charge capital to finance the

Advantages of overdraft finance, Advantages of Overdraft Finance ...

Advantages of Overdraft Finance 1. It is useful in financial crisis such an accountant cannot forecast because of abrupt fall in profits so liquidity problems. 2. In

Accounting rate of return method or arr, Accounting Rate of Return Method o...

Accounting Rate of Return Method or ARR This method utilizes accounting profits from financial status to assess the viability of investment proposal via diving the average inc

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd