Assume that Firm XYZs ROE= 15%, its beta = 2, the market return = 15%,...
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Accounting
Assume that Firm XYZs ROE= 15%, its beta = 2, the market return = 15%, the risk-free rate = 5%. The firms current Dividend Payout Ratio = 60%. If the firm increases its Dividend Payout Ratio to 80%, its instinct value will
Increase
Decrease
Stay the same
Not enough information to decide
First decrease in short-term and then increase in the long-term
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