Here are forecasts for next year for two stocks: Stock A Stock B Return on equity 18 % 12 % Earnings per share $ 2.00 $ 1.50 Dividends per share $ 1.00 $ 1.00 a. What are the dividend payout ratios...


Here are forecasts for next year for two stocks:









































Stock A



Stock B


Return on equity18%12%
Earnings per share$2.00$1.50
Dividends per share$1.00$1.00


a. What are the dividend payout ratios for each firm?(Do not round intermediate calculations. Enter your answers as a percent rounded to the nearest whole number.)









b. What are the expected dividend growth rates for each stock? Assume dividend has a steady growth for both stocks.(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)









c. If investors require a return of 18% on each stock, what are their values?(Do not round intermediate calculations. Round final answers to 2 decimal places.)








Jun 07, 2022
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