You are working on an equity valuation model. Based on historical trends and current market conditions, you expect the dividend-payout ratio will be 56 % and that long-term government bond rates will rise to 5.2 %. Because investors are becoming more risk averse, the equity risk premium will rise to 4.9 %. The return on equity is expected to be 13 %. What is the implied growth rate? Report your answer in decimal format rounded to four decimal places. Ex..123456 should be reported as ".1235") Answer:

You are working on an equity valuation model. Based on historical trends and current market conditions, you expect the dividend-payout ratio will be 56% and that long-term government bond rates will rise to 5.2%. Because investors are becoming more risk averse, the equry risk premium will rise to 4.9%. The return on equity is expected to be 13%. What is the implied growth rate? Report your answer in decimal format rounded to four decimal places. Ex. . 123456 should be reported as ".1235")