Business, 30.04.2021 02:10 hottie20

A. Computer stocks currently provide an expected rate of return of 12%. MBI, a large computer company, will pay a year-end dividend of $3 per share. If the stock is selling at $50 per share, what must be the market's expectation of the growth rate of MBI dividends? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If dividend growth forecasts for MBI are revised downward to 6% per year, what will be the price of the MBI stock? (Round your answer to 2 decimal places.)

c. What (qualitatively) will happen to the company's price–earnings ratio?

The P/E ratio will increase.
The P/E ratio will decrease.

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