Exhibit 12.4 Use the Information Below for the Following Problem(S)

question 120

Multiple Choice

Exhibit 12.4
Use the Information Below for the Following Problem(S)
Assume that the dividend payout ratio will be 45 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 7 percent and investors will require a 16 percent return. The return on equity will be 14 percent.
-Refer to Exhibit 12.4.What is the expected sustainable growth rate?

• A) 4.95
• B) 7.2
• C) 8.8
• D) 6.3
• E) 7.7

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Definitions:

Boundary Spanning

Activities or behaviors that involve interactions, collaborations, or exchanges across different organizational or social boundaries.

Overlap

The extent to which different tasks, interests, or responsibilities share common elements, areas, or aspects.

Boundary Spanner

An individual who operates at the edges or interface of two or more domains, groups, or organizations, facilitating interaction and understanding.

Information Broker

An individual or entity that collects, compiles, and distributes information from various sources.