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Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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The Bouchard Company’s EPS was $6.50 in 2018, up from
$4.42 in 2013. 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. (Hint: This is a 5-year growth period.)
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
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