Response to the following problem:
An investor estimates that next year's sales for New World Products should amount to about $75 million. The company has 2.5 million shares outstanding, generates a net profit margin of about 5%, and has a payout ratio of 50%. All figures are expected to hold for next year. Given this information, compute the following:
a. Estimated net earnings for next year
b. Next year's dividends per share
c. The expected price of the share (assuming the P/E ratio is 24.5 times earnings)
d. The expected holding period return (latest share price: $25)