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You have been reading about the Madison Computer Company (MCC), which currently retains 80 percent of its earnings ( $6 a share this year). It

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You have been reading about the Madison Computer Company (MCC), which currently retains 80 percent of its earnings ( $6 a share this year). It earns an ROE of almost 30 percent. a. Assuming a required rate of retum of 12 percent, how much would you pay for MCC on the basis of the earnings multiplier moder Do not round intermedlate calculations. Round your answer to the nearest cent, Enter zero if the obtained answer is economically meaningless. b. What would you pay for Madison Computer if its retention rate was 57 percent and its ROE was 16 percent? Do not round intermediate calculations. Round your answer to the nearest cent. Enter zero if the obtained answer is economically meaningless

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