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5. Constant growth and P/E ratio. Thermo Electron Systems (THS) anticipates a return on new investments (ROE*) of 10%. EPS next year is projected at

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5. Constant growth and P/E ratio. Thermo Electron Systems (THS) anticipates a return on new investments (ROE*) of 10%. EPS next year is projected at $5.60 and the dividend payout rate is 35%. Compute the sustainable growth rate (g) for THS. a) If the required return is 8%, compute the price (Po) and the forward P/E ratio. b) If the payout rate is increased to 45% beginning next year, what is the new growth rate (g) and the price

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