If a stock is correctly priced then you know that the present value of growth opportunities is all to setto the sum of the stock's expected capital gain and dividend yield is equal to the socks required rate of return the stock's required return is equal to the growth rate in earnings and dividends the dividend payout ratio is optimal while convertible bonds Floating-rate bonds are designed to are designed to Ti 3 O maximize the holders interest rate risk give investor the ability to share in the profits of the issuing company O give the investor the ability to benefit from interest rate changes, give the investor the ability to share in the profits of the issuing company O give the investor the ability to benefit from interest rate changes: give the investor the ability to share in the price appreciation of the company's O minimize the holders interest rate risk: give the investor the ability to share in the price appreciation of the company's stock When a firm's ROE W lower than its recjuired rate of return of stock, its PUGOS and when the two piwacks more earnings. It will shareholder's wealth Nevence Native decente Positive dere Poultheincrease