The Bouchard Company 's EPS was $6 50 in 2015, up from $4 42 in 2010 The company pays out 40 of its earnings as dividends, and its common stock sells for $36 00 a Calculate the past growth rate in earnings b The last dividend was D0 0 4 ($6 50) $2 60 Calculate the next expected dividend, D1, assuming that the past growth rate continues c What is Bouchard 's cost of retained earnings, rs

Question: The Bouchard Company's EPS was $6.50 in 2015, up from $4.42 in 2010. The company pays out 40% of its earnings as dividends, and its

The Bouchard Company's EPS was $6.50 in 2015, up from $4.42 in 2010. The company pays out 40% of its earnings as dividends, and its sells for $36 00.
a. Calculate the past growth rate in earnings.
b. The last was D0 = 0.4 ($6.50) = $2.60. Calculate the next expected assuming that the past growth rate continues.
c. What is Bouchard's cost of retained earnings, rs?

Step by Step Solution

★★★★★

3.40 Rating (159 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a With a financial calculator in... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1097-B-F-F-M(8296).docx

120 KBs Word File

Students Have Also Explored These Related Finance Questions!

Precision Ltd. (PL) is a private company that manufactures circular saw blades. Caroline Reynolds, the president, is concerned that PL has been losing its market share, and its operating results are...

No-Growth Industries pays out all of its earnings as dividends. It will pay its next $4 per share dividend in a year. The discount rate is 12%. a. What is the price-earnings ratio of the company? b....

During 2014, Omega, Inc., had sales of $ 7.16 billion, operating profit of $ 2.70 billion, and net income of $ 3.70 billion. EPS was $ 6.50. On June 9, 2015, one share of Omegas common stock was...

Bouchard Inc. uses a periodic inventory system. The following transactions took place during January 2017. The company sold 200 units during this month at $6 per unit. For specific identification...

11-16 COST OF COMMON EQUITY The Bouchard Company's EPS was $6.50 in 2015, up from $4.42 in 2010. The company pays out 40% of its earnings as dividends, and its common stock sells for $36.00. a....

The Bouchard Company's EPS was $6.50 in 2015, up from $4.42 in 2010. The company pays out 40% of its earnings as dividends, and its common stock sells for $36.00. a). Calculate the past growth rate...

hello kindly help me asnswer the following set of questions. Find in the attached. 1. The Heuser Company's currently outstanding bonds have a 9% coupon and a 14% yield to maturity. Heuser believes it...

The Bouchard Company's EPS was $6.50 in 2019, up from $4.42 in 2014. The company pays out 60% of its earnings as dividends, and its common stock sells for $40.00. Calculate the past growth rate in...

Project Cost 1 2 $2,000 3,000 5,000 2,000 Expected Rate of Return 16.00% 15.00 13.75 12.50 3 4 The company estimates that it can issue debt at a rate of r, = 10%, and its tax rate is 30%. It can...

10-16 COST OF COMMON EQUITY The Bouchard Company's EPS was $6.50 in 2012, up from $4.42 in 2007. The company pays out 40% of its earnings as dividends, and its common stock sells for $36.00 a....

1. Cost of common equity: The Bouchard Companys EPS was $6.50 in 2005, up from $4.42 in 2000. The company pays out 40% of its earnings as dividends, and its common stock sells for $36. a. Calculate...

Now we use a built-in routine in Excel for the paired t test to see if the two methods in Problem 4-14 produce significantly different results. Enter the data for Methods 1 and 2 into two columns of...

Mountain Timber Company established a $180 petty cash fund on January 1, 2016. Required a. Is the establishment of the petty cash fund an asset source, use, or exchange transaction? b. Record the...

Question 2 Assume the current stock price of Apple ( AAPL ) is $ 1 8 0 . 5 0 . The table below shows call and put option data at various expiration dates. \ table [ [ Expiration , Strike,Call...

A firm expects earnings next year of $10.00 per share, has a plowback ratio of 35%, a return on equity of 20%, and a required return of 15%. Mathematically illustrate the computation of the current...

Find dz if y = cos x O a. sin x O b. - cos x C. - sin x O d. cos x

If f(x) = (x2 + 1 )2-3x then f'(1) = %3D %3D O a. O b. - In(8e) O c.- In(8e) O d. - In(8)

Explain why the market value of common stock often differs from its liquidation value or its book value.

The weight of the delta function in the power spectral density (PSD) (the dc value) of a random process X(t) that has the correlation function given by RX(t) = 4[1 + exp(-2A|T|)] is O a. 3 m /2 O b....

10. The typical dynamics of unemployment over a recession The table below shows the behaviour of annual real GDP growth during three recessions. The data is from Table B-4 of the Economic Report of...

Indicate whether each of the following actions will increase or decrease a bonds yield to maturity: a. The bonds price increases. b. The bond is downgraded by the rating agencies. c. A change in the...

Why is a call provision advantageous to a bond issuer? When would the issuer be likely to initiate a refunding call?

Are securities that provide for a sinking fund more or less risky from the bondholders perspective than those without this type of provision? Explain.

Elon Musk has purchased insurance for his home with three different companies, Company A covers 2570, Company covers 2505 and Company co 3531. Assuming the insurers follow an equal shares method, how...

Preferred stock is used much less than long-term debt in the capital structure of most industrial and merchandising companies principally because of why

pls help with hw question The mean finish time for a yearly amateur auto race was 187.49 minutes with a standard deviation of 0.364 minute. The winning car, driven by Perry, finished in 186.95...