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The corresponding values for Black and Decker, in 1995, were as follows:
Beta = 1.30
MKTCAP = $ 5,500 million
DBTRATIO = 35%
ROE = 14.5%


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NCEX/TA = 4.00%
Black and Decker had a dividend yield of 1.3% and a dividend payout ratio of 24% in
1995.
a. Estimate the dividend yield for Allwaste, based upon the regression.
b. Why might your answer be different, using this approach, than the answer to the prior
question, where you used only the comparable firms?

17. Handy and Harman, a leading fabricator of precious metal alloys, pays out only 23%
of its earnings as dividends. The average dividend payout ratio for metal fabricating firms
is 45%. The average growth rate in earnings for the entire sector is 10% (Handy and
Harman is expected to grow 23%). Should Handy and Harman pay more in dividends just
to get closer to the average payout ratio? Why or why not?




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