$($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,

$$the expected level of earnings at the end of this year $($Upper E $1)$ is $$4,$

$$the firm follows a policy of retaining $30$ percent of its earnings,

$$the return on equity $($ROE$)$ is $15$ percent, and

$$similar shares of stock sell at multiples of $9\mathrm{.}333$ times earnings per share.

Now show that you get the same answer using the discounted dividend model.

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Part $1$

a$.$The stock price using the P$/$E ratio valuation method is $ $($Round to the nearest cent.$)$