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DFB, he expects earringsrest year of 5.00 per here, and plans to pay $3.00 dividend to shareholders assume that is one year from now). DFB

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DFB, he expects earringsrest year of 5.00 per here, and plans to pay $3.00 dividend to shareholders assume that is one year from now). DFB wil retain 12.00 per share of its eamings to reinvest in new projects that have expected return of 15.0% per year. Burpose in the same dividend payout retention, and women new investments in the future and will not change rate of outstanding shares. Assumere dividend is dus in one yea. What growth rate of earrings would you forecast for DFB 1. F's cost of capitalis 12.0%, what price would you look? Aidha per darrer del 200 pended the power over here in common. That is, how to be a higher vided intoad of investing in as many new projecte vor maintaines Wholowth rate of would you forecast for DFB DF's growth we of earrings Round to one decimal place) WF's guy cost of capital is 120, what price would you estimate for DFB stock? WDF's egy cost of capital is 12.0%, then DF's stock price wille Round to the marescent) Suppose med helped divided of 14.00 per here at the end of this year wd retained only $1.00 per share in earning. That is, chose to pay a higher dividend instead of reinvesting in as many new projects. Do mantenere higher payout role in the future, what stock price and you state for the firm now? DFB paid a dividend of 4.00 per share next year and retained only $1.00 per share in caring, then DF's stock price would be Round to the nearest cent) Should Be Me dividend? (Select the best choice below) OA NA OFB should not raive dividends because companies should always reinvest as much as possible OB. No, DFB should not se dividends because the projects we positive NPV. OC. Yes, bra should raise dividends because, according to the dividend discount mot doing so will always improve the show price ODY. DFB should raise dividends because the retum on new investments is lower than the cost of capital DFB, Inc. expects earnings next year of $5.00 per share, and it plans to pay a $3.00 dividend to shareholders (assume that is one year from now). DFB will retain $2.00 per share of its earnings to reinvest in new projects that have an expected return of 15.0% per year. Suppose DFB will maintain the same dividend payout rate, retention rate, and return on new investments in the future and will not change its number of outstanding share Assume next dividend is due in one year. a. What growth rate of earnings would you forecast for DFB? b. If DFB's equity cost of capital is 12.0%, what price would you estimate for DFB stock? c. Suppose instead that DFB paid a dividend of $4.00 per share at the end of this year and retained only $1.00 per share in earnings. That is, it chose to pay a higher dividend instead of reinvesting in as many new projects. DFB maintains this higher payout rate in the future, what stock price would you estimate for the firm now? Shoul DFB raise its dividend? a. What growth rate of earnings would you forecast for DFB

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