4. You forecast a company to have a ROE of 8%, a dividend payout ratio of 21%. Currently the company has a price of $30 and $4 earnings per share. What is the company's PEG ratio based on market price?

5. A company has a profit margin of 14%, an asset turnover ratio of 1.7, and an equity multiplier ratio of 1.65, both the tax burden and the interest burden are at 1, if the profit margin increases to 16% but the asset turnover ratio decreases to 1.1, what will be companys new ROE? Put answers in decimal places instead of percentage.

6. ART company has come out with a new and improved product. As a result, the market projects an ROE of 25% for the company, and we know the company will maintain a plowback ratio of 0.20. The company's earnings this year is $3 per share and the current market price is $35. If firms with similar risks in the industry have a PE ratio of 20 with an estimated earnings growth rate of 12%, is ART company overvalued or undervalued based on PEG approach?

A. The ART company is overvalued because it has a PEG ratio that equals to 1.42

B. The ART company is overvalued because it has a PEG ratio that equals to 2.22

C. The ART company is undervalued because it has a PE ratio that equals to 11.11

D. The ART company is overvalued because it has a PE ratio that equals to 22.15

E. The ART company is undervalued because it has a PEG ratio that equals to 1.42 F. The ART company is undervalued because it has a PEG ratio that equals to 2.22