You anticipate that Liebendauer Enterprises (ticker: LBE) will have earnings per share of $3 this year. Furtherm expect that they will pay out $2.25 of these earnings to shareholders in the form of a dividend at the end of this You estimate that LBE's return on new investments is 16% and their equity cost of capital is 13%. Your expecte rate for LBE's dividends will be closest to: OA. 4% OB. 3.3% O C. 1.6% OD. 2.4%

You anticipate that Liebendauer Enterprises (ticker: LBE) will have earnings per share of $3 this year. Furtherm expect that they will pay out $2.25 of these earnings to shareholders in the form of a dividend at the end of this You estimate that LBE's return on new investments is 16% and their equity cost of capital is 13%. Your expecte rate for LBE's dividends will be closest to: OA. 4% OB. 3.3% O C. 1.6% OD. 2.4%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 15P

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You anticipate that Liebendauer Enterprises (ticker: LBE) will have earnings per share of $5 this year. Furthermore, you expect that they will pay out $2.50 of these earnings to shareholders in the form of a dividend at the end of this year. You estimate that LBE's return on new investments is 15% and their equity cost of capital is 13%. Your expected growth rate for LBE's dividends will be closest to: OA. 3% OB. 6.5% OC. 7.5% OD. 4.5%
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