(Common stock valuation) Assume the following: - the investor's required rate of return is 13.5 percent, - the expected level of earnings at the end of this year (E1) is $6, - the retention ratio is 45 percent, - the return on equity (ROE) is 14 percent (that is, it can earn 14 percent on reinvested earnings), and - similar shares of stock sell at multiples of 7.638 times earnings per share. Questions: a. Determine the expected growth rate for dividends. b. Determine the price earnings ratio (PIE1). c. What is the stock price using the P/E ratio valuation method? d. What is the stock price using the dividend discount model? e. What would happen to the P/E ratio (P/E1) and stock price if the company increased its retention rate to 80 percent (holding all else constant)? What would happen to the P/E ratio (P/E1) and stock price if the company paid out all its earnings in the form of dividends? f. What have you learned about the relationship between the retention rate and the P/E ratios