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Youre thinking about buying some stock in Affiliated Computer Corporation and want to use the P/E approach to value the shares, You've estimated that next

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Youre thinking about buying some stock in Affiliated Computer Corporation and want to use the P/E approach to value the shares, You've estimated that next year's earnings should come in at about $3.62 a share. In addition, although the stock normally trades at a relative PE of 1.12 limes the market, you believe that the relative. PiE will rise to 1.21, whereas the market PIE should be around 18.3 times earnings. Given this information, what is the maximum price you should be willing to pay for this stock? If you buy this stock today at $73.16, what rate of retum will you eam if the price of the stock risos to your valuation? (Assume that the stock doesn' pay any dividends.) The maximum price you should be willing to pay for this stock is (Round to the nearest cent) The rate of retarn is W. (Round to two decimal places)

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