Next year, your company expects net income of $22 million. It pays 40% of its earnings out in dividends and has a cost of equity capital of 11%. a) If your company's net income has a 7% growth rate, what is the estimated value of your company? b) What is its re-investment rate (ie. internal rate of return on earnings retained and reinvested)? Now suppose instead that the company's re-investment rate (Le. internal rate of return) on all future retained earnings is 11%, and continue to assume initial earnings of $22 million. c) What would be the value of your company if it maintains a dividend payout ratio d) Does the value of the company in c) above change if the payout ratio is reduced e) Find the company's stock price one year from now under each of the two of 40%? to 25%? Why or why not? dividend policies described in c) and d). Which payout policy leads to a greater increase in the stock price? f) How can you reconcile the seemingly contradictory results obtained in parts d) and e)? Foc