• SP is a sustainable packaging company. They have developed a possibly innovative and (supposedly) environmentally friendly packaging product. They have decided to engage in an equity crowdfunding campaign. As is often the case, they have provided some financial guidance. They have achieved super-normal growth of 20% in EPS in the past year and expect to do so for the next five years. After that, analysts predict that the firm's gravity-defying growth will have to slow to the stable growth rate of the economy (assumed to be 3%). In the high growth period, the firms payout ratio is 10%, and is expected to increase to 50% in the stable growth period. EPS now is $2/share at time t = 0. The firm's beta is currently 1.5 and will decline to 1.1 in stable growth. The treasury bond rate
• is 7% and the market risk premium is 5.5%. Calculate the firm's P/E (price to earnings) ratio?