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Estimate the PE ratio for a firm which has the following characteristics: Variable High Growth Stable Growth Expected Growth Rate 30% 4% Payout Ratio 15%

Estimate the PE ratio for a firm which has the following characteristics:

Variable High Growth Stable Growth

Expected Growth Rate 30% 4%

Payout Ratio 15% 70%

Beta 1.00 1.00

Risk free rate = T-Bond Rate = 5.5%

Market Risk Premium 6.0%

High Growth period = 5 years

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