(Common stock valuation) Assume the following: the investor's required rate of return is 15 percent, the expected level of earnings at the end of this year (E1) is $5, the retention ratio is 55 percent, the return on equity (ROE) is 16 percent (that is, it can earn 16 percent on reinvested earnings), and similar shares of stock sell at multiples of 7.258 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? a. What is the expected growth rate for dividends? % (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. parts remaining Clear All