Question: Problem 9-03 Currently, the dividend-payout ratio ( D/E ) for the aggregate market is 45 percent, the required return ( k ) is 7 percent,

Problem 9-03

Currently, the dividend-payout ratio (D/E) for the aggregate market is 45 percent, the required return (k) is 7 percent, and the expected growth rate for dividends (g) is 2 percent. Round your answers to two decimal places.

Compute the current earnings multiplier.
x
You expect the D/E payout ratio to decline to 30 percent, but you assume there will be no other changes. What will be the P/E?
x

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