Question: Here are forecasts for next year for two stocks: Return on equity Earnings per share Dividends per share Stock A Stock B 14% 10% $2.00


Here are forecasts for next year for two stocks: Return on equity Earnings per share Dividends per share Stock A Stock B 14% 10% $2.00 $1.50 $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.) Answer is complete and correct. Stock A Stock B Payout ratio 50 % 67% 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.) Answer is complete but not entirely correct. Stock A Stock B Growth rate 7.00% 46.20 X % c. If investors require a return of 14% on each stock, what are their values? (Do not round intermediate calculations. Round final answers to 2 decimal places.) Answer is complete but not entirely correct. PV 0.93 % Stock A Stock B $ $ 0.64
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