Estimated market value of equity share

In order to find the estimated market value of an equity share of Heav Co, the following data has been provided by its finance manager: Constant dividend payout ratio = 40%. Recent payment of dividend = €0.20 per equity share Return on all new investments from retained profits = 10%. The estimated market value of equity share would therefore be: a €2.15 b €3.47 c €5.00 d €5.30 Answer – D The annual rate of growth in future dividends – g = bR is 10% x 60% = 6% Using the dividend growth model, the expected market value of each share is: Po = Do(1 + g)/(r – g) Po = 0·20(1 + 0·06)/0·10 – 0·06) = €5·30 John, I need a clarification on the first line where 10% x 60%. How the 60% percent is derived here? Could you please explain? Thanks a lot,