16 Question 16 10 pts Problem Set 4 (Questions 16, 17,...
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Question 16 10 pts Problem Set 4 (Questions 16, 17, 18 & 19 below are based on PS4. Question 7.16) PS4. Question 7.16 Commen Part: DFB Inc, expects earnings this year of $5 per share, and it plans to pay a $3 dividend to shareholders. DFB wilt retain $2 per share of its earnings to reinvest in new projects that have an expected return of 15% per year. Suppose DFB will maintain the same dividend payout rate, retention rate, & return on new investments in the future and will not change its number of outstanding shares Question: What growth rate of earnings would you forecast for DFB? 6.00% 15.00% 3.00% 9.00%
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