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Here are forecasts for next year for two stocks: ...

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Finance

Here are forecasts for next year for two stocks:

Stock A

Stock B
Return on equity 16 % 13 %
Earnings per share $ 2.00 $ 1.50
Dividends per share $ 1.00 $ 1.00

a. What are the dividend payout ratios for each firm? (Do not round intermediate calculations. Enter your answers as a percent rounded to the nearest whole number.)

b. What are the expected dividend growth rates for each stock? Assume dividend has a steady growth for both stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

c. If investors require a return of 16% on each stock, what are their values? (Do not round intermediate calculations. Round final answers to 2 decimal places.)

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