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3. A firm's equity has a ROE of 5% per year. Its projected earnings per share (EPS) in the next year is $2. The required

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3. A firm's equity has a ROE of 5% per year. Its projected earnings per share (EPS) in the next year is $2. The required rate of return on this stock is 8%. Based on the constant growth dividend discount model, answer questions (a) and (b). Show the calculations that support your answers (a) If the plowback ratio s 60%, what is this stock's present value of growth opportunities (PVGO) per share? (b) If the plowback ratio is 30%, what is this stock's present value of growth opportunities (PVGO) per share

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