DFB, inc expects earcings next year of $5.69 per shste, and it plans to pay a $3.30 dvidend to shareholsors (assume that is one year from now). DFB will rotain $2.39 per thare of ts eamros to teinvest in nee projects that have an expeclod retuin of 14.5% per year. Suppose OFB wil meintain the same dividend payout rate, retention rale, and return on new investrents in the Luture acd wil not change its number of outstanding thares Assume next dividend is due in one year, a. What growth rata of eamings would you forecas for DF B? b. If DFB's equity cos of capital is 12.3%, what price would you evmawe for DFB stock today? c. Sughose instead that DFe paid a civdend of 56.30 per share at the end of this year and retained only $1.39 per share in earnings. That at it chose to poy a higher dividend instasd of teinvesting in as many new projects. If DFE maintans thes tipher payout rese in the taure. What stock price would you estimate far the from nown should bf B mise its dividend? a, What growh nate de exnings would you forecast for DFB? DFB's growth rabe of eaminas is Ki, (Round wone decimal place.) b. If DFB's equity cont of capity is 12.3. what price would you estimale for DFB stock today? If DFBrs equiby cost of caphal is 123%, then DFB's stock price wal be I. (Round to the nearest cant) new projocts. If DFE maintains this higher payout rate in the future, What stock price would you estimase for the frim now? 5houls DF B raise its avisend? (Seisct the bes choich below) A. No, DFB thould not raise dividends tecause the projects are postive NPV 8. No, DFB shouls not fase divisents because cempanies vhould awayt renvest as much as possble c. Yos of should raise dividenss because the retum on new invertmerts is iower than the cost of capitat. D. Yes, DFE should raise dividends becaute, acootifing to the divisend dscount mostal, doing to wil always improve the thare pnoe