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Dawgs Inc. has a return on new investment of 30%, total earnings this year of $40 million, and 10 million shares outstanding. If you

 

Dawgs Inc. has a return on new investment of 30%, total earnings this year of $40 million, and 10 million shares outstanding. If you want dividends to grow by 10% per year, what payout rate do you need to maintain? [4] ASSUME: Risk-free rate=3%; Equity market risk premium=7%; Tax rate=21%.

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