USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 39

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Assume that the dividend payout ratio will be 55 percent when the rate on long-term government bonds falls to 9 percent. Because investors are becoming more risk averse, the equity risk premium will rise to 8 percent and investors will require a 7 percent return. The return on equity will be 13 percent.
-Refer to Exhibit 9.3. To what price will the market rise if the earnings expectation is $1.5?

• A) $138.42
• B) $90.36
• C) $71.74
• D) $105.30
• E) $85.14

---

Definitions:

Appendix

An additional section at the end of a book or document, providing extra information, tables, or references not included in the main text.

Additional References

Additional references are supplementary materials or sources cited to support, clarify, or augment the information presented in a document, presentation, or research.

Questionnaires

A research instrument consisting of a series of questions for the purpose of gathering information from respondents.

Prefatory Pages

Introductory sections of a document or book, including the title page, table of contents, and foreword.