What formula are they using for per(using price), per (using pvgo), per(using b)

Problem Set 2. Q4 (Chapter 13): Equity securities valuation Final exam. Estimated time 5 mins. Question text Q3. A company will pay a $3 dividend per share next year and is expected to continue to pay out 45% of its earnings as dividends for the foreseeable future. If the firm is expected to generate a 10% return on equity in the future, and if you require a 15% return on the stock, what is the value and the PER of the stock? Data Use the appropiate cells for your inputs ROE 10.00% Plowback ratio (b) 55.00% Payout ratio (p) 45.00% g 5.50% beta DO D1 3.00 $/share EO E1 6.67 $/share Ke 15.00% rf rm PER PO P1 PVGO EBIT Depreciation O Working Capital variation 0 Capex 0 Debt variation 0 FCFF O FCFF 1 FCFE O FCFE 1 Solution PVGO 12.87 E PO non 44.44 $/share E1 6.67 $/share VO 1.58 $/share using formula: VO = non grow + PVGO PER (using price) 4.74 PER (using PVGO) 4.74 Ask Expert PER (using b) 4.74 A+ You can ask 3