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Chapter 14, Problem 5DQ
Summary Introduction

To explain: Behavior of A Company’s payout policy in the future.

Payout Ratio:

It is used to define the proportion of earnings that a company shares with its shareholders as dividends. In other words, it is the fraction of net income to stockholders dividends.

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How can the Stock price be a good indicator of your company's financial health and may also reflect the market's attitude?
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Which of the following is the best reason why the price-earnings method is often used by investors to estimate the fair price of a stock? a) Because the earning multiples are easily found in online financial databases. b) Earnings per share is a known amount that is related to the payment of future dividends. c) Because the price-earnings method gives the same answer as the constant growth method and is easier to compute. d) The price-earnings method has been shown to provide the most accurate price estimate.
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Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License