The risk-free rate is 8%, the expected return on the market portfolio is 15%, and the stock of Hudson Corp. has a beta of 1.2. Hudson pays 40% of its earnings as dividends. The earnings next year are expected to be $12 per share. You expect Hudson to earn an ROE of 20%.
A. What is the value of Hudson Corp. stock?
B. What is the present value of growth opportunities?
C. What is the P/E ratio of Hudson Corp.?