Earnings per share have grown at constant rate

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Justin Cement Company has had the following pattern of earnings per share over the last five years: Year Earnings Per Share   2006 $ 10.00   2007 10.60   2008 11.24   2009 11.91   2010 12.62 The earnings per share have grown at a constant rate (on a rounded basis) and will continue to do so in the future. Dividends represent 40 percent of earnings. a.Project earnings and dividends for the next year (2011). 2011   Earnings $ Dividend $ If the required rate of return (Ke) is 13 percent, what is the anticipated stock price (P0) at the beginning of 2011? Anticipated stock price $

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Reference no: EM13928921

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