a. What greath rate of eamings wowd pou forecast lo bi be? a. What poswth ras of emanos wivid you forecaus tor ber b? (Hoccd be the newnot cent) DFB, inc expects earnings next year of $5.37 per share, and it plans to pay a $3.34 dividend to shareholders (assume that is one year from now). DFB will retain $2.03 per share of its earnings to reinvest in new projects that have an expecled return of 147% per year Suppose DFB will maintain the same dividend payout rate, relention rate and return on new investments in the future and will not change its number of outstanding shares Assume nexl dividend is due in one year a. What growth rate of earnings wouid you forecast for DFB? b. If DFB's equity cost of capital is 11.7%, what price would you estimate for DFB stock today? c. Suppose instead that DFB paid a dividend of $4.34 per share at the end of this year and retained only $1.03 per share in earnings. That is, it chose to pay a higher dividend instead of reinvesting in as many new projects. If DFB maintains this higher payout rate in the future, what stock price would you estimate for the firm now? Should DFB raise its dividend? a. What growth rate of earnings would you forecast for DFB? DFB's growth rate of earnings is % (Round to two decimal places) b. If DFB's equity cost of capital is 117%, what price would you estimate for DFB stock foday? If DFB's equity cost of capital is 117%, then DFB's stock price will be $ (Round to the nearest cent.) c. Suppose instead that DFB paid a dividend of $4.34 per share at the end of this year and retained only $1.03 per share in earnings. That is, it chose to pay a higher dividend instead of reinvesting in as many new projects. If DFB maintains this higher payout rate in the future, what stock price would you estimate for the firm now? If DFB paid a dividend of $4.34 per share next year and retained only $1.03 per share in earnings, then DFB's stock price would be $ (Round to the nearest cent.) Should DFB raise its dividend? (Select the best choice below.)