COST OF COMMON EQUITY
The Bouchard Company's EPS was $5.39 in 2016, up from $3.08 in 2011. The company pays out 60% of its earnings as dividends, and its common stock sells for $39.
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 = 0.60($5.39) = $3.23. 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. %