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Disaster LTD. management insists on reinvesting in projects that provide a ROE of 8%. The firm's beta is 2.0 and the expected market return rate

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Disaster LTD. management insists on reinvesting in projects that provide a ROE of 8%. The firm's beta is 2.0 and the expected market return rate is 5,4%. The firm's year-end dividend will be $3 per share, paid out of earnings of $6 per share. T-bills are paying 1,20% Using the CAPM and the DDM, what is the company's theoretical stock price and the PER of that company's stock? Use the appropiate cells for your inputs ROE Plowback ratio (b) Payout ratio (p) 8885 beta DO D1 EO E1 rf rm PER PO non growing co. PO P1 PVGO EBITO Depreciation o Working Capital variation o Capex O Debt variation o FCFF O FCFF1 FCFE O FCFE 1 Price

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