Determine the expected growth rate for dividends.

b$.$Determine the price earnings ratio $($P$/$Upper E $1).$

c$.$What is the stock price using the $$P$/$E ratio valuation$$ method?

d$.$What is the stock price using the dividend discount$$ model?

e$.$What would happen to the $$P$/$E ratio $($P$/$Upper E $1)$ and stock price if the company increased its retention rate to $70$ percent$($holding all else$$ constant$)?$ What would happen to the $$P$/$E ratio $($P$/$Upper E $1)$ and stock price if the company paid out all its earnings in the form of$$ dividends?

f$.$What have you learned about the relationship between the retention rate and the $$P$/$E$$ ratios?

Question content area bottom

Part $1$

a$.$What is the expected growth rate for$$ dividends?

$$

$5\mathrm{.}60\%($Round to two decimal$$ places.$)$

Part $2$

b$.$What is the price earnings ratio $($P$/$Upper E $1)?$

$$

$7\mathrm{.}738($Round to three decimal$$ places.$)$

Part $3$

c$.$What is the stock price using the $$P$/$E ratio valuation$$ method?

$$$

$$

$46\mathrm{.}428($Round to the nearest$$ cent.$)$

Part $4$

d$.$What is the stock price using the dividend discount$$ model?

$$$

$$

enter your response here $($Round to the nearest$$ cent.$)$

What is the expected growth rate for dividends?$($Round to two decimal places.$)$What is the price earnings ratio $($P$/$Upper E $1)?($Round to three decimal places.$)$$$($Round to the nearest cent.$)$$$($Round to the nearest cent.$)$

Help me solve this

View an example

Get more help