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Earnings Growth Calculations

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Bakerville Co. has recently announced that it would pay a DPS of \$0.64 on an EPS \$1.60. In the past, Bakerville Co. has earned a return of 25% on its investments, and the firm believes this will continue in the future. At what rate do you expect Bakerville's earnings to grow?

A

25%

B

15%

C

10%

D

5%