QUESTION 5 "Stockholders of Dogs R Us Pet Supply expect a 12% rate of return on their stock. Management has historically

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Question 5 Stockholders Of Dogs R Us Pet Supply Expect A 12 Rate Of Return On Their Stock Management Has Historically 1 (51.6 KiB) Viewed 32 times

QUESTION 5 "Stockholders of Dogs R Us Pet Supply expect a 12% rate of return on their stock. Management has historically been generating an ROE of 11%, but now believes that future ROE will be 10% for the next years. Given this, the firm's optimal dividend payout ratio is now QUESTION 6 "Suppose that next year the expected dividends of the stocks in a broad market index equaled $10,000,000 when the discount rate was 9% and the expected growth rate of the dividends equaled 4%. Using the constant-growth formula for valuation, if interest rates change to 10%, the percentage change in the value of the market index is Note: Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05"