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Today is January 1st, 2016. Fabregas, Inc. is projecting earnings per share (EPS) of $4.50 for January 1st, 2017. It plans to pay out 25%

Today is January 1st, 2016. Fabregas, Inc. is projecting earnings per share (EPS) of $4.50 for January 1st, 2017. It plans to pay out 25% of its earnings in dividends, and management is confident that its ROE of 10.5% on new investments can be maintained over a reasonably long horizon. The expected market return is 7%, Fabregas, Inc. has a Beta of 1.3, and the risk-free rate is 0.5%. For Fabregas, Inc. calculate the market capitalization rate, the growth rate of earnings, and todays price and P-E ratio(calculated as the ratio of todays price to expected earnings on January 1st, 2017). (Enter all answers with two decimal places and, if a percentage, the % sign). Market capitalization rate: unanswered Growth rate of earnings: unanswered Price: unanswered P-E: unanswered.

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