Exhibit 12.3 Use the Information Below for the Following Problem(S)

question 118

Multiple Choice

Exhibit 12.3
Use the Information Below for the Following Problem(S)
Assume that the dividend payout ratio will be 55 percent when the rate on long-term government bonds falls to 9 percent. Since investors are becoming more risk averse, the equity risk premium will rise to 8 percent and investors will require a 7 percent return. The return on equity will be 13 percent.
-Refer to Exhibit 12.3.To what price will the market rise if the earnings expectation is $1.5?

• A) $138.42
• B) $90.36
• C) $71.74
• D) $105.30
• E) $85.14

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Definitions:

Technological Change

The process of innovation and the introduction of new technologies or improvements on existing ones that impact society and the economy.

Sexual Values

The personal or societal beliefs regarding the morality, ethics, and acceptability of sexual behaviors and relationships.

Queer Theory

An intellectual movement that explores sexual orientation and gender identity as fluid, challenging traditional binaries.

Conflict Theory

A sociological perspective that emphasizes the role of power and inequality in society, focusing on how they contribute to social conflict and change.