Even Better Products has come out with an even better product. As a result, the firm projects an ROE of 20%, and it will maintain a plowback ratio of 0.30. Its earnings this year will be $3 per share. Investors expect a 13% rate of return on the stock. Required:

a. At what price and P/E ratio would you expect the firm to sell? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. What is the present value of growth opportunities? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. What would be the P/E ratio and the present value of growth opportunities if the firm planned to reinvest only 15% of its earnings? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

\begin{tabular}{|l|l|} \hline Price & \\ \hline P/E ratio & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline PVGO & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline P/E ratio & \\ \hline PVGO & \\ \hline \end{tabular}