(Common stock valuation) Assume the following: the investor's required rate of return is 14 percent, the expected level of earnings at the end of this year (Eq) is $6, the retention ratio is 60 percent, the return on equity (ROE) is 18 percent (that is, it can earn 18 percent on reinvested earnings), and similar shares of stock sell at multiples of 12.500 times earnings per share. e. Using the dividend discount model, what would be the stock price if the firm could earn 23% on reinvested earnings (ROE)? $ (Round to the nearest cent.) What would be the P/E ratio (PIE7) if the firm could earn 23% on reinvested earnings (ROE)? (Round to three decimal places.)