Dhe, Indexpects earnings this year of 54.07 per share, and it plans to pay a $2.36 dividend to shareholders DFS wit retain 51.72 per share of its earnings to reinvest in new projects with an expected return of 14.9% per year. Supposa OFB will rantain the same dividend payout rale, retention rate and return on new investments in the future and will not change its number of outstanding shares 2. What growth rate of earnings would you forecast for DFB? b. Fe's equity cost of capitalis 10%, what price would you estimate for DFB stock c. Suppose DFB instead pada dividend of 33 35 per Share this year and retained only 30.72 per share in earnings. That is, I chose to pay a higher dividend instead of reinvesting in as many new projects. It OFB maintains this higher payout rate in the future, what stock price would you essmate now? Should DFB follow this new policy? What growth rate of earings would you forecast for DFB? Earnings growth rate will be Round to two decimal places) OFB's equity cost of capital is 110% what price would you estimate for DFB stock The stock peice will be s Round to the nearest cent) c. Suppose DFB instead paid a dividend of 53.35 per share this year and retained only 50.72 per share in eamings. That is, it chose to pay a higher dividend Instead of revesting in as many new projects. It DFB maintens this higher payout rate in the future, what stock proe would you estimate now? In this case the stock price will be s Round to the newest cent) Should DFB follow this new policy? This is what the company should co (Select the best choice below) A Raise dividends because the return on new investments is lower than the cost of capital Notrase dividends because companies should always rinvestas much as possible C. Not se dividends ce projects have positive NPV when the return on new investment is higher than ther's cost of capital DRaise dividends because conding to the dividend-discount model doing so will always improve the share once