Stock A Stock 8 Return on equity 15% 12% Earnings per share $2.00 $1.50 Dividends per share $1.00 $1.00 a. What are the dividend payout ratios for each firm? (Do not round intermediate calculations. Enter your answers as a percent rounded to the nearest whole number.) Payout ratio Stock A Stock B

b. What are the expected dividend growth rates for each stock? Assume dividend has a steady growth for both stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Growth rate Stock A Stock B

C. If investors require a return of 15% on each stock, what are their values? (Do not round intermediate calculations. Round final answers to 2 decimal places.) PV Stock A Stock B