Question: Part B: Finding the expected return using the Gordon Model: Consider the following data. Calculate the company cost of equity. Find the price-earning (P/E) ratio.

Part B: Finding the expected return using the Gordon Model: Consider the following data. Calculate the company cost of equity. Find the price-earning (P/E) ratio. 3 4 5 5 7 3 1 2 3 3 Finding the expected return using the Gordon model Po $10.00 Stock price today b 45% Dividend payout ratio g 6.00% Annual dividend growth rate EPS, $0.55 Earnings per share Section a. E(re) 5 Section b. P/E Ratio

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