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 0.40. Its earnings this year will be $3 per share. Investors expect a 16% rate of return on the stock.

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.)

Price:

P/E Ratio:

What is the present value of growth opportunities?

PVGO:

What would be the P/E ratio and the present value of growth opportunities if the firm planned to reinvest only 30% of its earnings? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

PE Ratio:

PVGO: