A) Calculate the price of a firm with a plowback ratio of .5 if its ROE is 10%. Its current earnings, E1 are $4 per share and k = 10%
B) If the ROE for this same firm was 8% instead of 10%, with all the other information the same, what would the intrinsic price of the stock be?
C) If the ROE was 8% and the plowback ratio was changed to 0.0 what would the intrinsic price of the stock be?