3. The following table provides summary data for Ethan Allen, on June 30, 2014 per finance.yahoo.com (in millions). Analysts often use the observed PB ratio to infer market expectations regarding a companys future performance based on assumptions.
	Ethan Allen
	Market value of equity	$715.48
	Book Value of Equity	$367.57
	ROE	12.23%
For each of the cases determine implied parameter.
Case 1:	Analysts expect Ethan Allens ROE to be consistent with past performance and its discount rate to be 8.5%, calculate the implied growth rate.
Case 2:	Analysts are very uncertain about Ethan Allens future ROE but are fairly certain the company will grow at a rate of 6.5% and have a discount rate of 8.5%. Use this information to calculate the implied future ROE.