1. Zerrita flowers, a leading creator and manufacturer of flavors and fragrances in Asia has paid out dividends of Rs 0.91 per share on earnings per share of Rs 1.64 in 2012. The firm was expected to have a return on equity of 20% between 2013 and 2017, after which the firm was expected to have stable growth of 6% a year. (The return on equity was expected to drop to 15% in the stable growth phase.) The dividend payout ratio was expected to remain at the current level from 2013 to 2017. The stock had a beta of 1.10, which was not expected to change. The Treasury bond rate was 7%, and the risk premium is 5.5%. a. Estimate the PE ratio based on fundamentals.