1. Differentiate between each of the following terms: (6)
   1. Earnings Yield,
   2. Dividend Yield,
   3. PE Ratio.
2. List four most important factors that would influence an investment analyst in the rating

of PE ratios. (4)

3. The firm projects a ROE of 25%; it will maintain a plowback ratio of 0.3. The firm is

expecting earning of R5 per share and investors expect a return of 10% on the stock.

What is the expected price and P/E ratio of the firm?