Skyline Aero stock is currently selling for $18 a share The firm is expected to earn $1 98 per share this year and to pay a year end dividend of $0 72 a If investors require a 11 return, what rate of growth must be expected for Skyline Aero b If Skyline Aero reinvests earnings in projects with aver...

Skyline Aero stock is currently selling for $18 a share. The firm is expected to earn $1.98

Question:

Skyline Aero stock is currently selling for $18 a share. The firm is expected to earn $1.98 per share this year and to pay a year-end of $0.72.
a. If investors require a 11% return, what rate of growth must be expected for Skyline Aero?
b. If Skyline Aero reinvests earnings in projects with average returns equal to the stock's expected rate of return, what will be next year's EPS? [g = ROE(Retention ratio).] Dividend
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...