Stellar Baking Company in Australia has a trailing P$/$E of $14.$ Analysts predict that Stellar$$s dividends will continue to grow at its recent rate of $4\mathrm{.}5$ percent per year into the indefinite future. Given a current dividend and EPS of A$$0\mathrm{.}7$ per share and A$$2\mathrm{.}00$ per share, respectively, and a required rate of return on equity of $8$ percent, determine whether Stellar Baking Company is undervalued, fairly valued, or overvalued. Justify your answer. $($Select all statements which are correct$)$

Stellar Baking Company in Australia has a trailing P$/$E of $14.$ Analysts predict that Stellar$$s dividends will continue to grow at its recent rate of $4\mathrm{.}5$ percent per year into the indefinite future. Given a current dividend and EPS of A$$0\mathrm{.}7$ per share and A$$2\mathrm{.}00$ per share, respectively, and a required rate of return on equity of $8$ percent, determine whether Stellar Baking Company is undervalued, fairly valued, or overvalued. Justify your answer. $($Select all statements which are correct$)$

The payout ratio is $2\mathrm{.}86$

The company appears to be undervalued compared to the market trailing P$/$E of $14$

The retention ratio is $2\mathrm{.}86$

The payout ratio is $0\mathrm{.}35$

The trailing P$/$E based on fundamentals is $19\mathrm{.}41$

The retention ratio is $0\mathrm{.}35$

The company appears to be overvalued compared to the market trailing P$/$E of $14$

The trailing P$/$E based on fundamentals can be computed as payout$\_$ratio times one$\_$plus$\_$growth$\_$rate divided by required$\_$return$\_$minus$\_$growth$\_$rate

The trailing P$/$E based on fundamentals can be computed as retention$\_$ratio times one$\_$plus$\_$growth$\_$rate divided by required$\_$return$\_$minus$\_$growth$\_$rate

The trailing P$/$E based on fundamentals is $10\mathrm{.}45$