Question: Using the P / E ratio approach to valuation, calculate the value of a share of stock under the following conditions: the investors required rate

Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions:
the investors required rate of return is 15%
The expected level of earnings at the end of this year is $7
the firm follows a policy of retaining 30% of its earnings
The return on equity is 15%
Similar shares of stock sell at multiples of 6.667 times earnings per share

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