3. Stock valuntion methods: Adjusted dividend discount model Suppose that Airpower Co, a renewable energy startup, currently has earnings of $8 per share and that Ginny anticipates the earnings per share to grow by 4 percent per year. Using a mean industry PE ratio of 18 and the expected annual growth rate on the firm's existing earnings, the estimated stock price in three years is: $147.40 $157.12 $161.98 $166.84 Suppose Airpower Co. is expected to pay a dividend of $3 per share over the next three years, that Ginny's required rate of return is 16 percent, and that she plans to sell the stock at the end of the three-year time peridd. Under these circumstances, using the adjusted dividend discount model, the value of the stack today is: $93.93 per share 599.46 per share $110.51 per share $113.83 per share Which of the following are limitations to the price-earnings model? Check all that appiy. It assumes thet the dividend growth rate will never be higher than the required rate of return. It can result in inecourate valuations whon investors rely on an industry price-earnings ratio that uses a collection of firms that is too narrow, when additional compettors could have also been used. It can result in inaccurate valuations when investors rely on an industry price-earnings ratio that uses a collection of firms that is too broad, when a smaller, more representative collection of firms could have been used. It can retult in inaccurate valuations when a stack buyback occurs unexpectedly