Determine the price earnings ratio

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Reference no: EM131848042

1. The investors required rate of return is 10%

2. The expected level of earnings at the end of this year (E1) of $3.00

3. The retention ratio is 55%

4. The Return on Equity (ROE) is 14%

To find in excel

a. Determine the expected growth rate for dividends

b. Determine the price earnings ratio

c. What is the stock price using the P/E ratio valuation method?

d. What is the stock price using the dividend discount model?

Reference no: EM131848042

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