Radon Homes current EPS is $6.50. It was $4.42 five years ago. The company pays out 40% of its earnings
a. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.)
b. Calculate the next expected dividend per share, D1. Assume that the past growth rate will continue.
c. What is Radon Homes’ cost of equity, rs?
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Question Posted: September 23, 2011 11:21:51