15. What is the value using the P/E method? a. $4.50 b. $25.14 c. $36 d. $12 16. Is the firm under or overvalued? Don't forget a. Overvalued because it is selling for more than the upper limit of $33.87 b. Overvalued because it is selling for more than $36 c. Undervalued because it is selling for less than the upper limit of $44 to incorporate the 5% margin of error d. t could be over or under as one method is more than $40 and the other lesst 17. How much would you pay for a share of common stock that just paid a $3 dividend, grow 6% this next year? You plan to sell it for $67 at the than $40 it is expected to end of the year. Your required return is 11%. a. $62.21 b. $63.60 c. $57.30 d. $63.23 18. Use the following information to answer questions 18-21. Assume there are three stocks in your index. They are as follows: Stock A: Price $20 and 1,000 shares outstanding: Stock B: Price - $i5 a 1,500 shares outstanding: Stock C: Price $35 and 2,000 shares outstanding. What is the price weighted average? a. 50 b. 25.55 c. 35 d. 23.33 19. What is the new divisor if Stock A has a 2 for 1 stock split? a. 2.57 b.3.89 c. 20 d. 3 20. What is the new average if, after the splt, the stock prices change to: Stock A: Price $11, StockB Price $13; Stock C: Price $38. a. 20.67 b. 24.12 c. 15.94 d. 20.33 21. What is the Value Weighted Average of the stocks using the original prices in question 18 a. 23.33 b. 27.2 c. 25 d. 15.25