Question: EB Products has just released an improved product within its major product line. Due to this event, the firm projects an Rot of 17.5% and

EB Products has just released an improved product within its major product line. Due to this event, the firm projects an Rot of 17.5% and it will maintain a plowback ratio of 0.30. Its earnings this year will be $2.25 per share. Investors expect a 13% rate of return on the stock. [8 points] a. At what price and P/E multiple would you expect the firm to sell? b. What is the Present value of growth opportunities? c. What would be the P/E multiple and the PVGO if the firm planned to reinvest 20% of its earnings? d. What is an appropriate strategy to follow for this company when it comes to dividend policy

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