What is the vegmeat dividend payout ratio

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You are an analyst working for a mutual fund. Your job is to select stocks for the fund. You want to select only one of the following tech stocks to add into your current portfolio: PhoneExp and VegMeat. Both stocks are similar along many metrics. They are all in the technology space and have been growing very fast over the past few years. However, it is hard to get all the information for these stocks, and so far you have collected only the following relevant information to help you make the decision:

PhoneExp is a tech firm that focuses on developing and integrating mobile apps. Reading through analyst reports and based on your own judgement, you think the cost of equity for PhoneExp is 12%. PhoneExp estimated earnings per share next year are $10. It pays all its earnings as dividends.

VegMeat is a biotech firm that promotes and advocates sustainable food choices. Currently, VegMeat stock is trading at $100/share, with estimated earnings next year of $10/share. You read from their management disclosure and financial report that VegMeat retains 40% of their earnings for investments. Its reinvestment rate of return is 10%.

What is the Vegmeat dividend payout ratio?

Reference no: EM133074254

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