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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?
Reject
In statistical analysis, to refuse the null hypothesis, concluding there is sufficient evidence to support a significant effect or difference.
H0
Stands for the null hypothesis in statistical hypothesis testing, representing the assumption that there is no significant difference or effect.
Reject
In statistical hypothesis testing, the process of dismissing the null hypothesis based on the evidence from the data analysis.
H0
The null hypothesis in statistical analysis that indicates no significant difference or effect.
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