The Price earnings ratio (PE ratio) for a stock is a commonly used measure of how over-priced or underpriced a company's stock is. There are a number of different statistics about a company that are available that might explain why this ratio differs for different companies. One of these statistics is a measure of future growth. To examine the relationship between P Es and the measure of future growth (FG), you run a simple regression and get the equation

PE=3+.9FG.

The R2 for this model is 18% and the standard error is 5. Another model was run using a measure of dividends (D) to explain the PE. This gives the equation

PE =1.6 + 13.2D

A particular company has a value of 15 on the measure of future growth its P E ratio is 4.5 what would you conclude about this company's PE? Briefly explain