Question: Here are data on two stocks, both of which have discount rates of 15%: Stock A Stock B Return on equity 15 % 12 %

Here are data on two stocks, both of which have discount rates of 15%:

Stock A Stock B
Return on equity 15 % 12 %
Earnings per share $ 3.00 $ 2.30
Dividends per share $ 1.80 $ 1.80

a.

What are the dividend payout ratios for each firm? (Enter your answers as a percent rounded to 2 decimal places.)

Stock A Stock B
Dividend payout ratios % %

b.

What are the expected dividend growth rates for each firm? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Stock A Stock B
Expected dividend growth rates % %

c.

What is the proper stock price for each firm? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Stock A Stock B
Stock price $ $

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