Question
Here are data on two stocks, both of which have discount rates of 10%: Return on Equity Stock A: 10% Stock B: 8% Earnings per
Here are data on two stocks, both of which have discount rates of 10%:
Return on Equity Stock A: 10% Stock B: 8%
Earnings per share Stock A: $2.50 Stock B: $1.50
Dividends per share Stock A: $1.00 Stock B: $1.00
What are the dividend payout ratios for each firm? Enter your answer as a percent rounded to 2 decimal places.
Dividend Payout Ratio: Stock A:
Dividend Payout Ratio: Stock B:
(.40/.67 are incorrect)
What is the proper stock price for each firm? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Stock Price: Stock A:
Stock Price: Stock B:
(26.50/14.00 are incorrect)
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