Question 3 (20 points) The following are some key statistics of company ABC on 2/9/2021. 45 15 Price Forward P/E i.e. Po/E1) ROE Payout Ratio 15% 80% a) (7 points) Assume that ABC's ROE, payout ratio, and the cost of capital will remain constant forever. Estimate ABC's average annual return over the next ten years. b) (8 points) Is ABC a growth company? What is its PVGO? c) (5 points) You are concerned that the ROE of ABC may decline to a permanently lower level after the next five years. Still assuming that the payout ratio and the cost of capital will remain constant forever, how would your answer to part (a) change: up, down, or remain the same. Explain