Web Cites Research projects a rate of return of 10% on new projects. Management plans to plow back 20% of all earnings into the firm. Earnings this year will be $2 per share, and investors expect a rate of return of 4% on stocks facing the same risks as Web Cites.

a. What is the sustainable growth rate? (Enter your answer as a whole percent.)

b. What is the stock price?

c. What is the present value of growth opportunities (PVGO)?

d. What is the P/E ratio?

e. What would the price and P/E ratio be if the firm paid out all earnings as dividends?