The market consensus is that Post-it Molane Corporation has an ROE of 9% and a beta of 1.65. It plans to maintain indefinitely its traditional plowback ratio of 2/3. This year's earnings were $2.8 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 14%, and T-bills currently offer a 6% return. Required:

a. Find the price at which Post-it Molane stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. Calculate the P/E ratio. [Leading P/E = P0 / E1, Trailing P/E = P0 / E0](Do not round intermediate calculations. Round your answers to 2 decimal places.) c. Calculate the present value of growth opportunities. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) d. Suppose your research convinces you Post-it Molane will announce momentarily that it will immediately reduce its plowback ratio to 1/3. Find the intrinsic value of the stock. NOTE: assume that the immediate reduction in plowback ratio will impact next year's earings (i.e., E1). (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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