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Rubenstein Bros. Clothing is expecting to pay an annual dividend per share of $0.80 out...

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Rubenstein Bros. Clothing is expecting to pay an annual dividend per share of $0.80 out of annual earnings per share of $2.25. Currently, Rubenstein Bros.' stock is selling for $17.50 per share. Adhering to the company's target capital structure, the firm has $6 million in total invested capital, of which 40% is funded by debt. Assume that the firm's book value of equity equals its market value. In past years, the firm has earned a return on equity (ROE) of 16%, which is expected to continue this year and into the foreseeable future. a. Based on this information, what long-run growth rate can the firm be expected to maintain? (Hint: g = Retention rate

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