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

question 60

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.What is the expected sustainable growth rate?

• A) 5.85
• B) 7.15
• C) 4.05
• D) 6.75
• E) 8.25

---

Definitions:

Formal Networks

Structured groups of individuals or organizations that work together or share information within defined roles and protocols.

Informal Networks

The unofficial and interpersonal connections and pathways through which information flows within an organization, outside of formal communication channels.

Organizational Communication

This refers to the processes and methods through which information, ideas, and values are exchanged within an organization to achieve its goals and objectives.

Company Structure

The organized hierarchy or arrangement of departments, roles, and positions within a company, defining the lines of authority and communication.