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Good Products has come out with a new and improved product. As a result, the firm projects an ROE of 20%, and it will maintain

Good Products has come out with a new and improved product. As a result, the firm projects an ROE of 20%, and it will maintain a plowback ratio of .30. Its earnings this year will be $2 per share. Investors expect a 12% rate of return on the stock.

What would be the P/E ratio if the firm planned to reinvest only 20% of its earnings?

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