The dividend payout ratio,the required rate of return on common equity,and the expected growth rate of stock dividends are the major variables that affect
A) The profit margin for the S&P Industrials Index.
B) The earnings multiplier for common stock.
C) Aggregate tax revenues.
D) Capital gains tax revenues.
E) Aggregate GDP.

Question

Quizplus · Accepted Answer

The dividend payout ratio, required rate of return on common equity, and expected growth rate of stock dividends are all factors that can impact the earnings multiplier for common stock. The earnings multiplier is used to determine the current market price of a stock in relation to its earnings per share, and changes in these variables can affect investor perceptions of a company's future earnings potential and thus, its stock price.

The Dividend Payout Ratio,the Required Rate of Return on Common