The Bouchard Company's EPS was $6.50 in 2016, up from $4.42 in 2011. The company pays out 45% of its earnings as dividends, and its common stock sells for $32.
- Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places.
- The last dividend was D0 = 0.45($6.50) = $2.93. Calculate the next expected dividend, D1, assuming that the past growth rate continues. Do not round off intermediate calculations. Round your answer to the nearest cent
- What is Bouchard's cost of retained earnings, rs? Round your answer to two decimal places. Do not round your intermediate calculations.