1. Assume that you are comparing the dividend payout ratios of computer software companies and have run a regression of payout ratios on expected growth in earnings per share:

Dividend Payout ratio = 0.60 1.5 (Expected growth rate)

Thus, with an expected growth rate of 20%, your expected payout ratio would be how much? If a company pays no dividends, how high would its growth rate need to be to justify this policy.