Use the Information for the Question(s)below

question 87

Multiple Choice

Use the information for the question(s) below.
Defenestration Industries plans to pay a $4.00 dividend this year and you expect that the firm's earnings are on track to grow at 5% per year for the foreseeable future.Defenestration's equity cost of capital is 13%.
-Suppose that Defenestration decides to pay a dividend of only $2 per share this year and use the remaining $2 per share to repurchase stock.If Defenestration maintains this dividend and total payout rate,then the rate at which Defenestration's dividends and earnings per share are expected to grow is closest to:

• A)7%.
• B)13%.
• C)9%.
• D)5%.

---

Definitions:

Employee Talent

The skills, knowledge, or abilities possessed by an employee that contribute to their performance in the workplace.

Team Member Skills

Abilities and competencies that enhance the performance and integration of an individual within a team, such as communication, collaboration, and problem-solving.

Specialization

The process of focusing on and becoming an expert in a particular area of knowledge or skill, often to increase efficiency and effectiveness in professional roles.

Managerial Positions

Roles within an organization characterized by responsibilities of overseeing and directing operations or people.