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A firm has earnings of $1.45 this year and a P/E ratio of 20. It is currently expected to grow at 3.6% per year forever.
A firm has earnings of $1.45 this year and a P/E ratio of 20. It is currently expected to grow at 3.6% per year forever. What would its new P/E ratio be if it could increase this growth to 5.7% per year without a change in its cost of capital?
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