Calculate each company$$s future earnings growth rate. Using the earnings model, what is the value of the stock? Calculate the value without growth and PVGO separately.

Firm A

EPS$$0\mathrm{.}80$

PAYOUT RATIO $30\%$

REQUIRED RATE OF RETURN $12\%$

ROE $16\%$

Firm B

EPS $$1\mathrm{.}15$

PAYOUT RATIO $50\%$

REQUIRED RATE OF RETURN $11\%$

ROE $15\%$

Firm C

EPS $$1\mathrm{.}47$

PAYOUT RATIO $60\%$

REQUIRED RATE OF RETURN $12\%$

ROE $14\%$

Firm D

EPS$$1\mathrm{.}85$

PAYOUT RATIO $40\%$

REQUIRED RATE OF RETURN $14\%$

ROE $16\mathrm{.}00\%$

Focus especially on calculating the value of growth opportunities