Here are forecasts for next year for two stocks: ...
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Finance
Here are forecasts for next year for two stocks:
Stock A
Stock B
Return on equity
16
%
13
%
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 16% on each stock, what are their values? (Do not round intermediate calculations. Round final answers to 2 decimal places.)
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