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6 % O Q E lrttps'ng.cengagetumjstatfnbjuileum/index.html?deployment|d=5944072237501343542 5961 6573198195 BN=9781 337m3047&nb|d :1 8261 aisna pshotir .1: CENGAGE I MINDTAP Q Search this course 0 Ch 11: End-ofChapter Problems - Stock Valuation o x I R Problem 1103 An investor with a required return of 13 percent for very risky investments in common stock has analyzed three rms and must decide which, if any, to purchase. The information is as follows: Firm A B C Current earnings $1.70 $3.50 $6.90 Current dividend $1.50 $4.00 $6.30 ,_ Expected annual growth rate in 5% 4% -3% dividends and earnings Current market price $ 26 $ 48 $ 44 K a. What is the maximum price that the investor should pay for each stock based on the dividendegrowth madel?I Round your answers to the nearest cent. Stock A: $ . to Iii L Stuck B: if. Stack C: $ b. If the investor does buy stock A, what is the implied percentage return? Round your answer to two decimal places. ' % c. If the appropriate FIE ratio is 18, what is the maximum price the investor should pav for each stock? Round your answers to the nearest oent. ' Stack A: 35 Stock E: it; Stock C: $ 0 Type here to search "? Cengage Digital Learning MindTap - Cengage Lea X Course Hero + X O A https:/g.cengage.com/staticb/ui/evo/index.html?deploymentld=59440722375013485425961657319&elSBN=9781337403047&nbid=1826168&snapshotkc [!!] > CENGAGE |MINDTAP Q Search this course ? Ch 11: End-of-Chapter Problems - Stock Valuation X a. What is the maximum price that the investor should pay for each stock based on the dividend-growth model? Round your answers to the nearest cent. Stock A: $ Stock B: $ A-Z Stock C: $ b. If the investor does buy stock A, what is the implied percentage return? Round your answer to two decimal places. O % c. If the appropriate P/E ratio is 18, what is the maximum price the investor should pay for each stock? Round your answers to the nearest cent. Stock A: $ Stock B: $ Stock C: $ ? If the appropriate P/E ratio is 3, what is the maximum price the investor should pay for each stock? Round your answers to the nearest cent. Stock A: $ Stock B: $ Stock C: $ Grade it Now Save & Continue Continue without saving O Type here to search e M L O 9:02 PM 9/13/2020