15. CALCULATION OF g AND EPS Sidman Products's common stock currently sells for $58 a...
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Accounting
15.
CALCULATION OF g AND EPS
Sidman Products's common stock currently sells for $58 a share. The firm is expected to earn $4.64 per share this year and to pay a year-end dividend of $2.00, and it finances only with common equity.
If investors require a 8% return, what is the expected growth rate? Round your answer to two decimal places. Do not round your intermediate calculations. %
If Sidman reinvests retained earnings in projects whose average return is equal to the stock's expected rate of return, what will be next year's EPS? (Hint: g = (1 Payout ratio)ROE). Round your answer to the nearest cent. Do not round your intermediate calculations. $ per share
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