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An investor with a required return of 15 percent for very risky investments in common stock has analyzed three firms and must deide which, if

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An investor with a required return of 15 percent for very risky investments in common stock has analyzed three firms and must deide which, if any t purchase. The information is as follows: Firm Current earnings Current dividend Expected annual growth rate in dividends and earnings Current market price 1.90 $3.00 $6.70 $2.20 $2.10 $ 8.40 5% 1% -2% s 29 $ 19 5 a. What is the maximum price that the investor should pay for each stock based on the dividend-growth model? Round your answers to the cent. Stock A: $ Stock B: Stock C: b. If the investor does buy stock A, what is the implied percentage return? Round your answer to two decimal places c1f the appropriate P/E ratio is 17, what is the maximum price the investor should pay for each stock? Round your antwers to the nearest cent. Stock A: $ Stock B: $ Stock C: If the appropriate P/E ratio is 3, what is the maximum price the investor should pay for each stock? Round your answers to the nearest cent Stock A: Stock B: tock C

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