JP Morgan or JPM is a major bank. First, if JPM earns a ROEbook of 13.60% and their cost of equity is estimated to equal 8.5%, indicate whether and why the financial institution is creating or destroying value. Second, if their stock is selling at a price-book ratio of 1.50, estimate ROE market nad indicate if it is better aligned with the cost of equity than ROEbook. Third, estimate the fair value of their stock by application of the dividend growth model: V=D1/(Ke-g). The bank recently paid an annual dividend per share of $2.48(D0). The market projects dividends will grow 6.00% per year for the foreseeable future given management's resolution of many legal, regulatory and credit problems incurred during the crisis and expectations of continued economic growth.