Find the price and P-E ratio of the firm

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Reference no: EM131176526

Castles in the Sand generates a rate of return of 20% on its investments and maintains a plowback ratio of .40. Its earnings this year will be $3 per share. Investors expect a 15% rate of return on the stock.

a. Find the price and P/E ratio of the firm. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Price $ P/E ratio

b. Find the price and P/E ratio of the firm if the plowback ratio is reduced to .30. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Price $ P/E ratio

Reference no: EM131176526

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Find the price and P-E ratio of the firm : Castles in the Sand generates a rate of return of 20% on its investments and maintains a plowback ratio of .40. Its earnings this year will be $3 per share. Investors expect a 15% rate of return on the stock. Find the price and P/E ratio of the firm...

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