$3$

Company Q$\text{'}$s current return on equity $($ROE$)$ is $12\%.$ It pays out $40$ percent of earnings as cash dividends $($payout ratio $=0\mathrm{.}40).$ Current book value per share is $$69.$ Book value per share will grow as $Q$ reinvests earnings.

Assume that the ROE and payout ratio stay constant for the next four years. After that, competition forces ROE down to $10\mathrm{.}5\%$ and the payout ratio increases to $0\mathrm{.}70.$ The cost of equity is $10\mathrm{.}5\%.$

a$.$ What are Q$\text{'}$s EPS and dividends in years $1,2,3,4,$ and $5?$

b$.$ What is Q$\text{'}$s stock worth per share?

Complete this question by entering your answers in the tabs below.

What are Q$\text{'}$s EPS and dividends in years $1,2,3,4,$ and $5?$

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places.

$\backslash$table$[[$Year$,$EPS,Dividends$],[1,,],[2,,],[3,,],[4,,],[5,,]]$