P10-12 (similar to) Question Help o (Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions: the investor's required rate of return is 12 percent, . the expected level of earnings at the end of this year (Eq) is $4, the firm follows a policy of retaining 40 percent of its earnings, the return on equity (ROE) is 16 percent, and similar shares of stock sell at multiples of 10.715 times earnings per share. Now show that you get the same answer using the discounted dividend model. a. The stock price using the P/E ratio valuation method is $. (Round to the nearest cent.) Enter your answer in the answer box and then click Check Answer. ? 1 part remaining Clear All Check