Pettry, Inc. expects EPS this year to be $5.25. If EPS grows at an average annual rate of 10%, and if Pettry pays 60% of its earnings as dividends, what will the expected dividend per share be in 10 years?
What will be an ideal response?
Answer:
$5.25 (1 + 0.10)10 = 13.62 = EPS in 10 years
$13.62 × 0.6 = $8.17 = Expected dividends per share
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