The current $($equity$)$ earnings yield is: E$/$Po $=7\%$

We are looking for the overvaluation of the equity market compared to the $($government$)$ bond market, which has a yield of $9\mathrm{.}5\%.$So$,$ we must find the theoretical price P$$ such that: E$/$P$1=9\mathrm{.}5\%.$But, given that we don't know the value of $"$E$",$ we have to express Po in terms of P$1$