(Common stock valuation) Assume the following: - the investor's required rate of retum is 16 percent . the expected level of earnings at the end of this year (E) is $9, the retention ratio is 40 percent, . the return on equity (ROE) is 17 percent (that is, it can earn 17 percent on reinvested earnings), and similar shares of stock sell at multiples of 6.522 times earnings per share. Questions: a. Determine the expected growth rate for dividends. b. Determine the price eamings ratio (PE). c. What is the stock price using the P/E ralio valuation method? d. What is the stock price using the dividend discount model? e. What would happen to the P/E ratio (PE) and stock price If the firm could eam 22 percent on reinvested earnings (ROE)? f. What does this tell you about the relationship between the rate the firm can eam on reinvested carnings and P/E ralios? a. What is the expected growth rate for dividends? 6.80 % (Round to two decimal places.) b. What is the price earnings ratio (PE)? 6.962 (Round to three decimal places.)