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two companies are based in a country with an inflation rate of 2%. There is no real growth in earnings. The real rate of return

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two companies are based in a country with an inflation rate of 2%. There is no real growth in earnings. The real rate of return required by global investors for this type of stock investment is 5%. Assume that the Company A can only pass 60% of inflation through its earnings. What should be its PE using prospective earnings? Assume that the Company B can pass the full inflation through its earnings. What should be its P/E using prospective earnings? O Company A-20.0; Company B 24 O Company A 17.2; Company B-20 o Company A -20.0; Company B-36 Company A 12.0; Company B 20 Save Question 3 (2 points)

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