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Business, 21.11.2021 16:30 kevin72937

ABC stock has an expected ROE of 12% per year, earnings per share of $2, and dividends of $1.5 per share. Its market capitalization rate is 10% per year. a. Calculate the P/E ratio. b. If the plowback ratio were 40%, calculate the P/E ratio. c. Explain the change in the P/E ratio between (a) and (b).

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