The following table gives Foust Company's earnings per share for the last 10 years. The common stock, 7.2 million shares

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The following table gives Foust Company's earnings per share for
the last 10 years. The common stock, 7.2 million shares
outstanding, is now (1/1/19) selling for $79 per share. The
expected dividend at the end of the current year (12/31/19) is 55%
of the 2018 EPS. Because investors expect past trends to continue,
g may be based on the historical earnings growth rate. (Note that 9
years of growth are reflected in the 10 years of data.)
The current interest rate on new debt is 12%; Foust's marginal
tax rate is 40%; and its target capital structure is 30% debt and
70% equity.