2 For a company r= 20% EPS = $12.00 PO Ratio = 50% ROE = 15% What is the Price of this stock? 3 re For a company: 20% EPS = $12.00 PO Ratio = 20% ROE = 15% What is the Price of this stock? Refer back to problem #2. In problem #3 the company increased its plowback ratio; they increased their rate of reinvestment into the company. So why did the price of their stock decrease? 4 For a company r= 20% EPS = $ 10.00 PO Ratio = 30% ROE = 25% dov = 108.30 = 30 8 = 25 x 10 = = = 150 What is the price of this stock? 3 3 020 What would the price of the stock be if the Plowback ratio was zero? 3 =15 20-1/8 20-0 What is the present value of growth opportunities for this company