What are the dividend payout ratios for firm

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1) Here are data on two stocks, investor required return is 15 percent:

Stock A

Return on Equity 12%

Earnings Per Share $2.00

Dividends per share $1.00

Stock B

Return on Equity 10%

Earnings Per Share $1.50

Dividends per share $1.00

a. What are the dividend payout ratios for each firm?

b. What are the expected dividend growth rates for each firm?

c. What is the proper stock price for each firm?

Reference no: EM132531295

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