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answer part B in first picture. answer part A and B in second picture. = Question 3, P10-12 (simi... Part 2 of 2 HW Score:
answer part B in first picture. answer part A and B in second picture. = Question 3, P10-12 (simi... Part 2 of 2 HW Score: 79.17%, 3.17 of 4 points Points: 0.5 of 1 Save (Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions: the investor's required rate of return is 16 percent, the expected level of earnings at the end of this year (E) is $4, the firm follows a policy of retaining 30 percent of its earnings, the return on equity (ROE) is 12 percent, and similar shares of stock sell at multiples of 5.645 times earnings per share. Now show that you get the same answer using the discounted dividend model. a. The stock price using the P/E ratio valuation method is $ 22.58 . (Round to the nearest cent.) b. The stock price using the dividend discount model is $. (Round to the nearest cent.) Question 2, P10-5 (simil... Part 1 of 2 HW Score: 79.17%, 3.17 of 4 points Points: 0.67 of 1 Sa (Common stock valuation) The common stock of NCP paid $1.22 in dividends last year. Dividends are expected to grow at an annual rate of 7.40 percent for an indefinite number of years. a. If your required rate of return is 9.50 percent, what is the value of the stock for you? b. Should you make the investment? a. If your required rate of return is 9.50 percent, the value of the stock for you is $). (Round to the nearest cent.)
answer part A and B in second picture.
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