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5. Proctor & Gamble Co. (PG) in the U.S. has a trailing P/E of 25.5. Analysts predict that Proctor & Gamble's dividends will continue to
5. Proctor & Gamble Co. (PG) in the U.S. has a trailing P/E of 25.5. Analysts predict that Proctor & Gamble's dividends will continue to grow at its recent rate of 5.5 percent per year into the indefinite future. Given a current dividend and EPS of $3.16 per share and $5.38 per share, respectively, and a required rate of return on equity of 7 percent, determine whether Proctor & Gamble Company is undervalued, fairly valued, or overvalued. Justify your answer. (8 points)
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