Question: (a) Using the relevant (possibly rearranged) formula(s), discuss the validity of the fol- lowing statement: The higher the plowback ratio of a company, the higher

(a) Using the relevant (possibly rearranged) formula(s), discuss the validity of

(a) Using the relevant (possibly rearranged) formula(s), discuss the validity of the fol- lowing statement: "The higher the plowback ratio of a company, the higher its P/E ratio. (b) A firm has an expected ROE of 10% and plans to maintain its plowback ratio of 75%. This year's earnings amount to 5 EUR per share and the dividend has just been paid. The cost of capital is 8.36%. What's the fair price for the stock of that firm? What about its P/E ratio and PVGO

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