10. Assume that the dividend payout ratio will be 55 percent when the rate on long-term government bonds falls to 9 percent. Since investors are becoming more risk averse, the equity risk premium will rise to 8 percent and investors will require a 7 percent return. The return on equity will be 13 percent. What are the expected sustainable growth rate and expectation of the market P/E ratio? 4.50. 47.83 b. 7.15. 47.83 5.85, 47.83 d. 5.85, 58.50 None of the above c. e. a. 11. What effect does a stock substitution or stock split have on a price-weighted series? Index remains the same, divisor will increasc/decrease, b. Divisor remains the same, index will increase/decrease. Index and divisor will both remain the same. d. Index and divisor will both reflect the changes (immediately). e. Not enough information is provided. c. a. 12. Which of the following statement is correct? Most technicians employ several indicators and attempt derive a consensus to guide their decision to buy, sell, or do nothing. b. Without access to superior analytical advice, you should run your portfolio like an index fund or exchange traded fund (ETF). We should only invest based on insider information A and B A, B and C. c. d. c