Valuation and financial modeling

3. Gizzly plc is a publicly traded company in stable growth, expecting to grow at 4% a year in perpetuity. The return on equity for the company 10% and its cost of equity is 8% a. Estimate the intrinsic' P/E ratio for the company. (2 marks) b. If you believe a company cannot earn more than its cost of equity in the long run, by how much (in percentage terms) is the equity in Gizzly over or under valued