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Suppose PowerWind CO4 a renewable energy startup is expected to generate earnings of $10 per share next year. If the mean ratio of share price

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Suppose PowerWind CO4 a renewable energy startup is expected to generate earnings of $10 per share next year. If the mean ratio of share price to expected eamings of competifilitirms in the same industry is 13 , then using the price-earnings valuation method, the valuation of the firm's shares is: $110.50 per share $130.00 per share $133.90 per share $139.10 per share Which of the following are limitations to the price-earnings model? Check all that apply. It can result in inaccurate valuations when investors are misled by firms who use accounting methods to indicate that earnings in a particular period will be substantial, even though they will not be able to sustain that level of earnings in the future. It can result in inaccurate valuations when investors rely on an industry price-eamings ratio that assigns incorrect weighting to various industry firms. It can result in inaccurate valuations when the required rate of return by investors is incorrectly estimated. It assumes that the dividend growth rete will never be higher than the required rate of return

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