Question 8 of 10 This quiz: 10 points) possible This question: 1 point(s) possible DFB, Inc. expects earnings next year of $5 87 per share, and it plans to pay a $3.98 dividend to shareholders (assume that is one year from now) DFB will retain $1.89 per share of its eamings to rein an expected return of 14 6% per year. Suppose DFB will maintain the same dividend payout rate, retention rate, and return on new investments in the future and will not change its number of outstandes dividend is due in one year a. What growth rate of earnings would you forecast for DFB? b. If DFB's equity cost of capital is 12.9%, what price would you estimate for DFB stock today? c. Suppose instead that DFB paid a dividend of $4.98 per share at the end of this year and retained only $0.89 per share in eamings That is, it chose to pay a higher dividend instead of reinvesting in am maintains this higher payout rate in the future, what stock price would you estimate for the firm now? Should DFB raise its dividend? - a. What growth rate of earnings would you forecast for DFB? DFB's growth rate of earnings is% (Round to one decimal place) b. It DFB's equity cost of capital is 12.9%, what price would you estimate for DFB stock today? If DFB's equity cost of capital is 12.9%, then DFB's stock price will be $(Round to the nearest cent.) c. Suppose instead that DFB paid a dividend of $4.98 per share at the end of this year and retained only $0.89 per share in earnings. That is, it chose to DFB maintains this higher payout rate in the future, what stock price would you estimate for the firm now? (Round to them If DFB paid a dividend of $4.98 per share next year and retained only $0.89 per share in earnings, then DFB's stock price would be $ Should DFB raise its dividend? (Select the best choice below) A. No, DFB should not raise dividends because the projects are positive NPV vat yuar and team only . per snare in earnings, then DFB's st- Should DFB raise its dividend? (Select the best choice below.) A. No, DFB should not raise dividends because the projects are positive NPV OB. No, DFB should not raise dividends because companies should always reinvest as much as possible. OC. Yes, DFB should raise dividends because the return on new investments is lower than the cost of capital. OD. Yes, DFB should raise dividends because, according to the dividend-discount model, doing so will always