Exam2.Attempt2.BLANK.D2Lpdf-Adobe Acrobat Reader DC le Edit View Window Help Home Tools Exam2.Attempt2.BL. 3 6 | 83.1% A company is considering inereasing current capacity while at the same time increasing the proportion of net income paid to shareholders in the form of dividends. To expand operations, the company wil need to raise capital. Financial statement information for both before and after the expansion is provided in the table below. Dividends were just paid today (T0). All numbers, ineluding shares outstanding, are reported in millions. Use this information for Problems 12 15 BEFORE AFTER 200 150 105 10 500 400 250 200 60 Pretax Income Net Income Dividends Shares Outstanding Total Assets Total Equity 600 400 12.After the expansion, which of the following statements (s (are) TRUE . The company's payout ratio will be equal to the company's retention ratio II. The company payout ratio will be the same as company's retention ratio before the expansion II The company has a higher ROE and more debt in the capital structure D. Il,l E. None of the statements 13. Before the expansion, the company has a price of $120.00 per share. According to the Dividend Discount Model where dividends grow at constant rate in perpetuity at a rate related to dividend payout and return on equity, the cost of equity is closest to A 36.0% B. 35.0%