Using the $$P$/$E ratio approach to$$ valuation, calculate the value of a share of stock under the following$$ conditions:

bullet$$the$$ investor's required rate of return is $13$percent$,$

bullet$$the expected level of earnings at the end of this year $($Upper E $1)$ is $$$$7,$

bullet$$the firm follows a policy of retaining $30$ percent of its$$ earnings,

bullet$$the return on equity $($ROE$)$ is $15$percent$,$ and

bullet$$similar shares of stock sell at multiples of $8\mathrm{.}236$ times earnings per share.

Now show that you get the same answer using the discounted dividend model.