$($c$)$ Candidates mostly understood the formulae for PE and PB and found this part of the question easy.

Price to book ratio PB:

$\frac{V{E}_t^{**}}{CS{E}_t}=1+\frac{1}{CS{E}_t}{\displaystyle \underset{i=1}{\overset{}{}}}\frac{E_t(A{E}_{t+i})}{(1+r_E{)}^i}$

Price to earnings ratio $PE$ :

$\frac{V{E}_t^{**}+N{D}_t}{C{E}_t}=\frac{1+r_E}{r_E}(1+\frac{1}{C{E}_t}{\displaystyle \underset{i=1}{\overset{}{}}}\frac{E_t(A{E}_{t+i})}{(1+r_E{)}^i}).$

Obviously, in the complete absence of abnormal earnings $AE,PB=1$; and $PE\frac{1+r_E}{r_E}=11.$