7. A company whose stock is selling at a P/E ratio greater than the P/E ratio of a market index

most likely has ________.

A. an anticipated earnings growth rate which is less than that of the average firm

B. a dividend yield which is less than that of the average firm

C. less predictable earnings growth than that of the average firm

D. greater cyclicality of earnings growth than that of the average firm

E. None of these is correct.

8. A firm has a return on equity of 14% and a dividend payout ratio of 60%. The firm's

anticipated growth rate is ________.

A. 5.6%

B. 10%

C. 14%

D. 20%

E. None of these is correct