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Using the P / E ratio approach to valuation, calculate the value of a share of stock under the following conditions the investor's required rate
Using the PE ratio approach to valuation, calculate the value of a share of stock under the following conditions
the investor's required rate of return is percent,tl
the expected level of earnings at the end of this year E is $
the firm follows a policy of retaining percent of its earnings,
the return on equity ROE is percent,
andsimilar shares of stock sell at multiples of times earnings per share
Now show that you get the same answer using the discounted dividend model
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