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XYZ stock has an expected ROE = 11% per year, expected EPS of $8, expected dividends of $1 per share. Its discount rate is 12%.

XYZ stock has an expected ROE = 11% per year, expected EPS of $8, expected dividends of $1 per share. Its discount rate is 12%. What comes closest to its justified P/E ratio?

5.3

4.8

7.3

6

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