A company has expected earnings of 3 per share for next


A company has expected earnings of $3 per share for next year. The firm's ROE is 20%, and its earnings retention ratio is 70%. If the firm's market capitalization rate is 15%.

1) What is the present value of its growth opportunities?

2) What is the stock’s P/E ratio?

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Financial Management: A company has expected earnings of 3 per share for next
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