Saveco is a company in stable growth. Please use the following information to compute its actual and justified CURRENT/TRAILING valuation ratios. Please show your work. Stock price $148.00 EPS $4.81 Dividends per share $1.42 Book value of equity per share $28.06 Sales per share $260.86 ROE 18.00% Beta of stock 1.00 Market risk premium (equity risk premium) 8.00% Risk free rate 5% Hint a. Recall CAPM: cost of equity (r) Risk free rate Beta Market risk premium b. the growth rate can be estipated by g-retention ratio * ROE, where retentio ratio (b) is b 1- dividend/Net Income 1- Dividend per share/EPS , see lecture notes a. What is Saveco's actual PE PB PS ratio? (0.1*3 PE PB PS Answer b. What is Saveco's justified PE PB PS ratio? (0.3*3) PE PB PS Answer c. According to your answers in a and b, which ratio(s) indicate Saveco's stock is undervalued? List ALL ratio(s). No partial credit for this question (0.2) Answer Saveco is a company in stable growth. Please use the following information to compute its actual and justified CURRENT/TRAILING valuation ratios. Please show your work. Stock price $148.00 EPS $4.81 Dividends per share $1.42 Book value of equity per share $28.06 Sales per share $260.86 ROE 18.00% Beta of stock 1.00 Market risk premium (equity risk premium) 8.00% Risk free rate 5% Hint a. Recall CAPM: cost of equity (r) Risk free rate Beta Market risk premium b. the growth rate can be estipated by g-retention ratio * ROE, where retentio ratio (b) is b 1- dividend/Net Income 1- Dividend per share/EPS , see lecture notes a. What is Saveco's actual PE PB PS ratio? (0.1*3 PE PB PS Answer b. What is Saveco's justified PE PB PS ratio? (0.3*3) PE PB PS Answer c. According to your answers in a and b, which ratio(s) indicate Saveco's stock is undervalued? List ALL ratio(s). No partial credit for this question (0.2)