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Castles in the Sand generates a rate of return of 20% on its investments and maintains a plowback ratio of .50. Its earnings this year

Castles in the Sand generates a rate of return of 20% on its investments and maintains a plowback ratio of .50. Its earnings this year will be $4 per share. Investors expect a 15% rate of return on the stock. A. Find the price and P/E ratio of the firm. B. Find the price and P/E ratio of the firm, if the plowback ratio is reduced to .40

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