Please answer them Carry out calculations to at least 4 decimal places. Enter percentages as whole...

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Please answer them Carry out calculations to at least 4 decimal places. Enter percentages as whole numbers. Example: 3.03% should be entered as 3.03. Do not include commas or dollar signs in numerical answers.

business finance

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Answer 1

Answer #1

Question 7

price of the stock=earnings next year/(cost of capital-growth rate)

=0.81/(11.4%-3%)

=9.6429

firm's P/E ratio=9.6429/0.81

=11.9048 or 11.90

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Answer 2

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