Question: f. What have you learned about the relationship between the retention rate and P/E ratios? the investor's required rate of return is 17 percent, the

f. What have you learned about the relationship between the retention

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

the investor's required rate of return is 17 percent, the expected level of earnings at the end of this year (El) is $7, the retention ratio is 60 percent, the return on equity (ROE) is 17 percent (that is, it can earn 17 percent on reinvested earnings), and similar shares of stock sell at multiples of 5.883 times earnings per share. using it UIVIUEN U UISCOUNT TOUCI, Wilal woulu Ve VIC SUN Price II IC TUTTI COLIU tall Z270 UIT TEMVESCU tanys (UL): $ 73.68 (Round to the nearest cent.) What would be the P/E ratio (PIE7) if the firm could earn 22% on reinvested earnings (ROE)? (Round to three decimal places.)

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