The company Haytech, Inc. is a 100% equity financed firm. The stock is currently valued at $25 per share, with analysts expecting earnings of $2.25 per share for the next year.Assume that: (a) the required rate of return on equity (discount rate) for Haytech is 13.50%, (b) the company has 150 million shares outstanding, and (c) the company's payout ratio will remain constant at 50%.

A. What is the market capitalization of Haytech, Inc's equity today? (please answer in billions, rounded to two decimal points, i.e. 12,250,000,000 would be entered as 12.25)

B. What dividend per share do investors expect next year? (roundto three decimal places, i.e. 1.234)

C. What is thedividendgrowth rate analysts must currently anticipate in order to justify the current share price given the figures above, assuming the same growth rate forever?Enter percentage as a decimal, rounded to three decimal places, i.e. 12.3% would be entered as 0.123.

D. Based on the below table of data for comparable companies, calculate an estimate of Haytech's P/E ratio.Please roundanswer to one decimal place, i.e. 12.3.

Company Stock Price EPS

Graintech $10 $1.23

Corntech $20 $1.84

Barleytech $30 $2.96

Soybeantech $40 $4.04

Wheattech $50 $5.22

E. What is the actual "forward" P/E ratio for Haytech, based on the assumptions made at the beginning of the problem? Please roundanswer to one decimal place, i.e. 12.3 ("forward" means utilizing the next forecasted earnings, as opposed to using the most recentearnings).

F. Based on your answers to the previous two questions, is Haytech's stock price currently: Cheap or Expensive