Question: Company Q's current return on equity (ROE) is 14%. It pays out one half of earnings as cash dividends (payout ratio = 0.5) Current book

Company Q's current return on equity (ROE) is 14%. It pays out one half of earnings as cash dividends (payout ratio = 0.5) Current book value per share is $50. Book value per share will grow as a reinvests earnings Assume that the ROE and payout ratio stay constant for the next four years. After that, competition forces ROE down to 11.5% and the payout ratio increases to 0.8. The cost of capital is 115% a. What are Q's EPs and dividends in years 1, 2, 3, 4, and 5? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Your EPS Dividends 2 3 4 5 b. What is Q's stock worth per share? (Do not round int Stock worth per share

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