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8.04 You have been reading about the Madison Computer Company (MCC), which currently retains 82 percent of its darnings ( $7 a share this vear).

8.04
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You have been reading about the Madison Computer Company (MCC), which currently retains 82 percent of its darnings ( $7 a share this vear). It earns an ace of almost 32 percent. a. Assuming a required rate of return of 13 percent, how mueh would you pay for mce on the basis of the earnings multiplier moder? Do not round intermediate calculations. Round your answer to the nearest cent, Inter zero it the obtained answer is economically meaningless. s b. What would you pay for Madison Computer if its retention rate was 61 percent and is rof was to percent? Do not round intermediate calculations, flound your answer to the nearest cent. Enter zero if the obtained answer is economically meaningless. 1 Continue without saving

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