Castles in the Sand generates a rate of return of 10% on its investments and maintains a plowback ratio of .20. Its earnings this year will be $4 per share. Investors expect a 8% rate of return on the stock.

a.	Find the price and P/E ratio of the firm. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Price	$
P/E ratio

b.	Find the price and P/E ratio of the firm if the plowback ratio is reduced to .10. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Price	$
P/E ratio