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DVN Plc. has a share price of 11. The company regularly has total net earnings 7 million per year. Every year it pays out all

DVN Plc. has a share price of 11. The company regularly has total net earnings 7 million per year. Every year it pays out all its earnings to shareholders. There are 8 million shares in issue.

a) What is the plowback ratio and pay-out ratio for this firm? [10 Marks] b) What rate of return do shareholders in this firm expect?

b) What rate of return do shareholders in this firm expect?

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