Problem $9-04$

equity risk premium will decline to $4$ percent. As a result, investors will require a $10$ percent return, and the return on equity will be $12$ percent.

a$.$ What is the expected growth rate? Round your answer to one decimal place.

$\%$

b$.$ What is your expectation of the market $\frac{P}{E}$ ratio? Do not round intermediate calculations. Round your answer to two decimal places.

$x$

$