calculate the growth rate, Finance Basics

The Mountain Fresh Company had earnings per share (EPS) of $6.32 in 2006 and $11.48 in 2011. The company pays out 30 percent of its earnings as dividends per share (DPS), and the company's stock price is currently $37.50 (in 2011).

(a) Calculate the growth rate in dividends (g) over this 5-year period.

Dividend Growth Rate (g) = _________________.

(b) Calculate the expected dividend per share next year (i.e., what is D1, assuming the earnings and dividends of Mountain Fresh growth at a constant rate).

Expected Dividend Next Year (D1) = __________________.

(c) Based on the information given above, what is the cost of retained earnings common equity (rs) for Mountain Fresh Company?

Cost of Retained Earnings (rs) = __________________.

Posted Date: 4/1/2013 3:35:24 AM | Location : United States







Related Discussions:- calculate the growth rate, Assignment Help, Ask Question on calculate the growth rate, Get Answer, Expert's Help, calculate the growth rate Discussions

Write discussion on calculate the growth rate
Your posts are moderated
Related Questions
Explain the term- Order Brokers receive numerous different types of buying and selling orders from their customers. Brokerage orders very as to the price at which order may

You are taking an investment in the common stock of Crisp's Cookware. The stock is expected to pay a dividend of $2.00 a share at the end of the year (D1=2.00). The stock has a bet

• Company X has $100,000 face value of outstanding bonds consisting of 100 $1,000 face value bonds with a 4% annual coupon and 20 years remaining until maturity. The bonds are cur

Lock-Box System In a lock-box system, the customer sent the payments to a post office box. The post office box is emptied with the firm's bank at minimum once or twice all bus

Advantage of Leasing an Asset 1. The company has the choice to purchase assets on the expiry of the lease period at that time it will identify the viability of the asset


Fixed income security can be defined as the financial obligation of an entity (known as the issuer), which promises to pay a specified amount of money on a pre-sp

Central Bank - Banking Institutions This is a bank which is entrusted along with the responsibility of keeping economic stability and financial soundness of a country.  Theref

A firm's current ratio is 1.5, and its quick ratio is 1.0. If its current liabilities are $10,000, what are its inventories?   a Current Ratio

Important Points - Creditors Finances When by using creditor's finances a company must consider: 1. That cost of finance is less than the Return that implies the rate shoul