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NEW QUESTION: 1
A stock's P/E ratio is 10.4, with an expected return on equity of 14% and a dividend growth rate of 5.7%.
The firm's dividend payout ratio equals ________.
A. 13.68%
B. 86.32%
C. 24.19%
D. 56.17%
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Po/E1 = dividend payout/(k - g)
Therefore, 10.4 = dividend payout /(0.14 - 0.057), giving dividend payout = 86.32%.

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