Question: 3. This question requires data collection. You can find all numbers on http://finance.yahoo.com. The questions concern HP Inc. (ticker: HPQ). On April 7, 2022, Warren

3. This question requires data collection. You can find all numbers

3. This question requires data collection. You can find all numbers on http://finance.yahoo.com. The questions concern HP Inc. (ticker: HPQ). On April 7, 2022, Warren Buffetts firm Berkshire Hathaway announced that it had taken a $ 4.2 billion stake in the company. (a) What is the current price and the current price-earnings ratio? (b) What is the current plowback ratio? (c) What is the growth rate of earnings for the next 5 years according to the analysts? Hint: look for annual growth rates under "Analysis" (d) What is the beta? Hint: look for Statistics. If the risk-free rate (Rf) is 5% and the market risk premium E[RM] Rp is 6%, what is the required rate of return on HPQ according to the CAPM? (e) Suppose the earnings and dividends of HP will grow at a rate equal to the forecast from part (c) forever; i.e., the Gordon growth model (GGM) applies. What is the price-earnings ratio that the GGM predicts for HP? (f) What growth rate does the market price-earnings ratio price in (a) imply? 3. This question requires data collection. You can find all numbers on http://finance.yahoo.com. The questions concern HP Inc. (ticker: HPQ). On April 7, 2022, Warren Buffetts firm Berkshire Hathaway announced that it had taken a $ 4.2 billion stake in the company. (a) What is the current price and the current price-earnings ratio? (b) What is the current plowback ratio? (c) What is the growth rate of earnings for the next 5 years according to the analysts? Hint: look for annual growth rates under "Analysis" (d) What is the beta? Hint: look for Statistics. If the risk-free rate (Rf) is 5% and the market risk premium E[RM] Rp is 6%, what is the required rate of return on HPQ according to the CAPM? (e) Suppose the earnings and dividends of HP will grow at a rate equal to the forecast from part (c) forever; i.e., the Gordon growth model (GGM) applies. What is the price-earnings ratio that the GGM predicts for HP? (f) What growth rate does the market price-earnings ratio price in (a) imply

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