USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 116

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The aggregate market currently has a retention ratio of 60 percent, a required rate of return of 12 percent, and an expected growth rate for dividends of 4 percent.
-Refer to Exhibit 9.9. If the payout ratio changes to 50 percent, but there are no other changes, what will be the new P/E?

• A) 3.25
• B) 4.16
• C) 5.75
• D) 6.25
• E) 7.67

---

Definitions:

Input Device

A hardware component used to enter data into a computer system, such as a keyboard, mouse, or scanner.

Desktop PC

A personal computer designed for regular use at a single location on or near a desk due to its size and power requirements.

Mouse

A hand-held pointing device used to control a cursor in a graphical user interface on a computer screen, facilitating smooth navigation, selection, and interaction with digital elements.

RS-232 Port

A standard for serial communication transmission of data that connects computers, terminals, and various peripherals.