The Dividend Payout Ratio for the Aggregate Market Is 65

question 138

Multiple Choice

The dividend payout ratio for the aggregate market is 65 percent, the required rate of return is 12 percent, and the expected growth rate for dividends is 6 percent. Compute the current earnings multiple.

• A) 5.41
• B) 16.25
• C) 6.25
• D) 10.83
• E) 11.58

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Definitions:

Statistical Significance

Statistical significance is a measure indicating the likelihood that a result from data analysis is not due to chance, usually determined through a specific threshold value or p-value.

Chance Fluctuation

Random variations in data or processes that are not attributable to any specific cause, often observed in statistical analyses.

Correlation Coefficients

Statistical measures that indicate the strength and direction of a linear relationship between two or more variables.

Compensation Systems

Structured plans outlining how employees are paid, including wages, salaries, bonuses, and benefits.