What is the dividend payment in 2012

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The Claustrophobic Solution, Inc., a residential window and door manufacturer, has the following historical record of earnings per share (EPS) from 2011 to 2007:


2011

2010

2009

2008

2007

EPS

$1.10

$1.05

$1.00

$0.95

$0.90

The company's payout ratio has been 60% over the last five years and the last quoted price of the firm's share of stock was $10. Flotation costs for new equity will be 7%. The company has 30,000,000 of common shares of stock outstanding and a debt-equity ratio of 0.5.

If dividends are expected to grow at the same arithmetic average growth rate of the last five years, what is the dividend payment in 2012?

 

Reference no: EM13265316

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