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Here are data on two stocks, both of which have discount rates of 15 percent

Constant-Growth Model. Here are data on two stocks, both of which have discount rates of 15 percent

Q-20 Constant-Growth Model

Constant-Growth Model. Here are data on two stocks, both of which have discount rates of 15 percent:

Return on equity
15%
10%
Earnings per share
$2.00
$1.50
Dividends per share
$1.00
$1.00

What are the dividend payout ratios for each firm?
What are the expected dividend growth rates for each firm?
What is the proper stock price for each firm?
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