One year from now, analysts expect Harvest Food's earnings per share (EPS) to be $4.34. Analysts also expect Harvest to pay a dividend of $2.00 per share one year from now. Assume that Harvest does not plan to repurchase shares or issue new shares. The firm's expected return on new investment is 13.3%. If Harvest keeps its dividend payout rate and return on new investment constant forever, what annual growth rate do you expect in Harvest's dividends?

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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One year from now, analysts expect Harvest Food's earnings per share (EPS) to be $4.34. Analysts also expect Harvest to pay a dividend of $2.00 per share one year from now. Assume that Harvest does not plan to repurchase shares or issue new shares. The firm's expected return on new investment is 13.3%. If Harvest keeps its dividend payout rate and return on new investment constant forever, what annual growth rate do you expect in Harvest's dividends?

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