a) A firm is expected to have no growth in all the coming years, and therefore will pay out all its earnings to its shareholders each year. What is your best estimate of its PE ratio given that people require 10% return on investment in its equity? b) Alternatively, suppose that this firm can achieve 8% growth of earnings each year in all the coming years if it reinvests 40% of its earnings each year to expand its operation, and that this is what the firm is doing. What is your best estimate of its PE ratio? c) How do you adjust your estimate above (upward or downward) if you know that the growth opportunity as described above will last only in the foreseeable future, but not forever? a) A firm is expected to have no growth in all the coming years, and therefore will pay out all its earnings to its shareholders each year. What is your best estimate of its PE ratio given that people require 10% return on investment in its equity? b) Alternatively, suppose that this firm can achieve 8% growth of earnings each year in all the coming years if it reinvests 40% of its earnings each year to expand its operation, and that this is what the firm is doing. What is your best estimate of its PE ratio? c) How do you adjust your estimate above (upward or downward) if you know that the growth opportunity as described above will last only in the foreseeable future, but not forever