4. Forward PE Approach Assuming Pfizer (PFE)'s ROE (return on equity) is 20%, long term sustainable EPS (Earnings-per-share) growth rate is 4%, EPS: (expected EPS next year) is $3, required rate of return k is 9%. a. Show how to derive PE's implicit factor ROE and compute the PE:(forward PE ratio at the end of next time that is PO/El). b. How does PE ratio change if ROE increases, holding other factors constant? c. How does dividend payout ratio change if ROE increases? How does plowback ratios change if ROE increases? e. Estimate the intrinsic value for the stock 4. Forward PE Approach Assuming Pfizer (PFE)'s ROE (return on equity) is 20%, long term sustainable EPS (Earnings-per-share) growth rate is 4%, EPS: (expected EPS next year) is $3, required rate of return k is 9%. a. Show how to derive PE's implicit factor ROE and compute the PE:(forward PE ratio at the end of next time that is PO/El). b. How does PE ratio change if ROE increases, holding other factors constant? c. How does dividend payout ratio change if ROE increases? How does plowback ratios change if ROE increases? e. Estimate the intrinsic value for the stock