YEAR	LOW	HIGH	EARNINGS	DIVIDENDS	BOOK VALUE	(D/E)	ANNUAL AVG	ROE
2010	$ 26.50	$ 35.30	$ 4.56	$ 1.72	$ 25.98	37.7%	7	17.6%
2011	$ 28.30	$ 37.00	$ 5.02	$ 1.95	$ 29.15	38.8%	6.2	17.3%
2012	$ 23.50	$ 34.30	$ 5.14	$ 2.20	$ 32.11	42.8%	5.8	16.0%
2013	$ 27.80	$ 35.00	$ 4.47	$ 2.20	$ 30.86	49.2%	7.7	14.5%
2014	$ 29.00	$ 47.80	$ 5.73	$ 2.30	$ 30.30	40.1%	6.8	18.9%
2015	$ 36.60	$ 53.50	$ 6.75	$ 2.40	$ 39.85	35.6%		16.9%
2016			$ 6.75	$ 2.60	$ 44.00	38.5%		15.3

b. Show that from 2010 through 2015 the per annum growth rate in dividends was 6.9 percent and for earnings was 8.2 percent (both rounded). e. What factors are important in explaining the difference in the P/E ratios of CocaCola and PGJ? f. From your calculation of the growth rate of dividends in (b), assume that the annual rate is 7 percent. If the required rate of return for the stock is 12 percent and the expected dividend payout ratio is 0.4, show that P/E = 8. g. If the dividend payout ratio is 0.4 and the ROE is 15 percent, show that g = 0.09. h. Using k = 0.14 and g = 0.09, with expected 2016 dividends of $2.60, show that the intrinsic value is $52. i. Assume that the beta for PGJ is 0.8 relative to Cokes beta of 1.1. Is this informa- tion of any help in explaining the different P/E ratios of these two companies?