DI DFB, Inc expects eamings next year of $500 per shwe, and it plans to pay a $300 dividend to shareholders (assume that is one year from nowi DFB will rotan $2.00 per shoes carrings to meet in new projects that have an expected return of 15.0% per yeat. Suppose DFB wit maintain the same dividend payout rate, retention rate, and totum on investments in the future and will not change its number of outstanding shares Assume next dividend is due in one year a. What growth rate of earnings would you forecast for DFB? b. HOFB's equity cost of capital is 120%, what price would you estimate for DFB stock today? c. Suppose instead that DFB paid a dividend of $400 per share at the end of this year and retained only $100 per share in camings That I chose to pay a higher dividend instead of onveiling na many new projects. If DFB maintains this higher payout rate in the future, what stock price would you estimate for the firm now? Should DFB raises dividend? a Wisal growth rate of earnings would you forecast for DFB? Fly growth rate of owning in E (Round to one decimal place b. Sequity cost of capital is 12.0% what price would you some for of stock oday? Fes equity cost of capital 12 05. then DFB stock price will be $1000 Round to the rest cant) c. Suppose instead that DFB paid a dividend of 5400 per shate at the end of this year and retained only 5100 per share in earnings. That is chose to pay a higher dividendendo umiestnem may now projects DFB maintains this higher payout rate in the future, what stock price would you estimate for the firm now? Flipud a dividend of 5400 per she next year and retained only $100 per sharon coming the DFI's stock pice would be 54464 Round to the rest cert Should DFBrasse is dividend? (Select the best choice below) ho A No DFB should not raise dividends because companies should always reinvest as much as possil B. Yes DFBI should se dividends because, according to the dividend discount model doing so will always improve the share price C Yes DFB should rase dividends because the sum on new investments is lower than the cost of capital