Question: Defenestration Industries plans to pay a $ 4 . 0 0 dividend this year and you expect that the firm's earnings are on track to

Defenestration Industries plans to pay a $4.00 dividend this year and you expect that the firm's earnings are on track to grow at 6% per year for the foreseeable future. Defenestration's equity cost of capital is 14%.Suppose that Defenestration decides to pay a dividend of only $2 per share this year and use the remaining $2 per share to repurchase stock. If Defenestration maintains this dividend and total payout rate, then what is the rate at which Defenestration's dividends and earnings per share are expected to grow?

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