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%
i. What is the stock price using the dividend discount model?
ii. What is the stock price using the P/E ratio valuation method?
iii. Determine the price earnings ratio
iv. Determine the expected growth rate for dividends