Question: note that beta is constant The following data apply to the next three questions You have been asked to estimate the growth rates and P/E

note that beta is constant
note that beta is constant The following data apply to the next

The following data apply to the next three questions You have been asked to estimate the growth rates and P/E ratio for a firm that has the following characteristics? 28.5714% 8.3333% 1.3 Return on Equity (ROE) in first 5 years Return on Equity (ROE) after 5 years Beta Dividend payout ration in first 5 years Dividend payout Mer 5 years Risk free rate= ury bond rate Market Risk Premium (MRP) 30% 40% 5% 6.5% What is your estimate to the expected growth rate during the first 5 years? O a 18% Ob. 19% OC 20% Od 30% O e None of the above Wat is your estimate to the expected growth rate after 5 years? O a 3% Ob 4% Oo8% od 10% None of the above

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