ebook Problem 11-03 An investor with a required return of 16 percent for very risky investments in common stock has analyzed three firms and must decide which, if any, to purchase. The Information is as follows: w Firm A B Current earnings $2.00 33.00 $7.50 Current dividend $2.00 $3,40 $7.90 Expected annual growth rate in dividends and earnings Current market price $ 29 531 551 1. What is the maximum price that the investor should pay for each stock based on the dividend-orowth model? Round your answers to the nearest cent. Stock: Sto: 5 Stock Expected annual growth rate in 6% 39 -2% dividends and earnings Current market price $ 29 $ 31 $ 51 a. What is the maximum price that the investor should pay for each stock based on the dividend-growth model? Round your answers to the nearest cont. Stock A: $ Stock B: $ Stock C: $ b. If the investor does buy stock A, what is the implied percentage return? Round your answer to two decimal places. c. If the appropriate P/E ratio is 18, what is the maximum price the investor should pay for each stock? Round your answers to the nearest cent. Stock A: $ Stock B: $ Stock C: $ If the appropriate P/E ratio is 5, what is the maximum price the investor should pay for each stock? Round your answers to the nearest cent. Stock A: $ Stock B: 5 Stock C: $