The Bouchard Company's EPS was $6.80 in 2021, up from $3.34 in 2016. The company pays out 60% of its earnings as dividends, and its common stock sells
for $40.00.
a. Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places.
b. The last dividend was Do = 0.60($6.80) = $4.08. Calculate the next expected dividend, D1, assuming that the past growth rate continues. Do not round
intermediate calculations. Round your answer to the nearest cent.
$
c. What is Bouchard's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places.
%