The following is information on Lawnmower Inc.'s income statement and comparable companies. --The company's dividend payout ratio is 60% of net income and the company has 180,000 shares outstanding. --The dividend is expected to increase by 7.0% in the next year, 5.0% in the year after next year, and then increase at a constant rate of 3.0% thereafter --Investors require an annual return of 11.0% on the stock --The current year income statement for Lawnmower is given below --Share price and financial information of comparable companies is below

1) What is the market value of a share of Lawnmower's stock using the dividend discount model?

2) If you value a share of Lawnmower's stock at the average P/E of the comparable companies what value would result?

3) If Lawnmower has a higher expected earnings growth rate than the comparable companies, should Lawnmower have a higher or lower multiple than the comparable companies?

Lawnmower, Inc. Comparable companies' information Current year Revenue SharePrice Revenue EPS