D. 2% 5. Brevik Builders has an expected ROE of 25%. Its dividend growth rate will be 30% of earnings in the form of dividends. if it follows a policy of paying A. 5% B. 15% C. 17.5% D. 45% 6. Rose Hill Trading Company is expected to have EPS in the upcoming year of S8. The expected ROE is 18%. An appropriate required returm on the stock is 14%. If the firm has a plough back ratio of 70%, its dividend in the upcoming year should be A. SI.12 B. S1.44 C. S2.40 D. S5.60 7. Flanders, Inc. has expected earnings of $4 per share for next year. The firm's ROE is 8%, and its earnings retention ratio is 40%. If the firm's market capitalization rate is 15%, what is the present value of its growth opportunities? A. -$6.33 B. S0 C. S20.34 D. $26.67 8. Firm A is high-risk, and Firm B is low-risk. Everything else equal, which firm would you expect to have a higher P/E ratio? A. Firm A B. Firm B C. Both would have the same P/E if they were in the same industry. D. There is not necessarily any linkage between risk and PE ratios