3. Suppose we consider a firm with positive net present value of growth opportunities. We saw that the price of the stock could be expressed as follows:

P = (EPS / i) + NPVGO

If we divide each side of the equation by the firms earnings per share, we arrive at a P/E ratio for which we could use to compare firms which have similar P/E multiples. However, this begs the question of just how comparable these firms are to each other. Explain how each of those determinants plays a part across supposedly similar firms.