High Tech Chip Company Is Expected to Have EPS in the Coming

question 34

Multiple Choice

High Tech Chip Company is expected to have EPS in the coming year of $2.50. The expected ROE is 12.5%. An appropriate required return on the stock is 11%. If the firm has a plowback ratio of 70%, the growth rate of dividends should be

• A) 5.00%.
• B) 6.25%.
• C) 6.60%.
• D) 7.50%.
• E) 8.75%.

---

Definitions:

Office of Management and Budget

A U.S. government office responsible for developing the federal budget and overseeing the effective implementation of government financial policies and programs.

Administrative Agencies

Government bodies responsible for the oversight and administration of specific functions, such as regulation or enforcement of laws and public policies.

Fourth Branch

Informal term for groups or entities, like the media or regulatory agencies, that influence but do not belong to the official branches of government.

Administrative Law Judges

Officials who preside over hearings involving federal regulatory agencies, making decisions on disputes between those agencies and individuals or entities.