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3) The net profit of firm A in this year is $10 million. There are 1 million outstanding shares. The book value per share is

3) The net profit of firm A in this year is $10 million. There are 1 million outstanding shares. The book value per share is $10 and the market price per share is $40. It is known that the earnings growth rate is 10%. Calculate the Price to earnings (PE) ratio of firm A.

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