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please quickly Question 3: Assume that a firm currently has earnings of 15 USD per share, growth rate of stock's carnings is expected to be
please quickly
Question 3: Assume that a firm currently has earnings of 15 USD per share, growth rate of stock's carnings is expected to be 3%, if the mean PE ratio of all other firms in the same industry is 5, and the firm is expected to pay a dividend of 2 USD per share over the next four years. Given that the investor's required rate of return is 11%. Based on the above information, answer the following questions: A. What is the value of expected earnings in four years. B. What is the expected stock price in four years' time. C. What is the PV of expected cash flows to be received by the investor. D. How would an increase in the market's PE ratio affect the stock's valuation Step by Step Solution
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