Question: Radon Homes' current EPS is $6.38. It was $3.91 five years ago. The company pays out 55% of its earnings as dividends, and the stock
Radon Homes' current EPS is $6.38. It was $3.91 five years ago. The company pays out 55% of its earnings as dividends, and the stock sells for $31. A. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places. ? % B. Calculate the next expected dividend per share, D1 (Hint: D0 = 0.55($6.38) = $3.51). Assume that the past growth rate will continue. Round your answer to the nearest cent. $ C. What is Radon Homes' cost of equity, rs? Round your answer to two decimal places. ? %
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