Even better products has come out with a new and improved product. as a result, the firm projects an roe of 20%, and it will maintain a plowback ratio of 0.30. its projected earnings are $2 per share. investors expect a 14% rate of return on the stock.

a.
at what price and p/e ratio would you expect the firm to sell? (do not round intermediate calculations. round your answers to 2 decimal places.)

price $
p/e ratio
b.
what is the present value of growth opportunities? (do not round intermediate calculations. round your answer to 2 decimal places.)

Exercise 18-15 sheffield appliance center is an experienced home appliance dealer. sheffield appliance center also offers a number of services for the home appliances that it sells. assume that sheffield appliance center sells ovens on a standalone basis. sheffield appliance center also sells installation services and maintenance services for ovens. however, sheffield appliance center does not offer installation or maintenance services to customers who buy ovens from other vendors. pricing for ovens is as follows. oven only $790 oven with installation service 850 oven with maintenance services 970 oven with installation and maintenance services 990 in each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $180. additionally, the incremental amount charged by sheffield appliance center for installation approximates the amount charged by independent third parties. ovens are sold subject to a general right of return. if a customer purchases an oven with installation and/or maintenance services, in the event sheffield appliance center does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $790. assume that a customer purchases an oven with both installation and maintenance services for $990. (b) indicate the amount of revenue that should be allocated to the oven, the installation, and to the maintenance contract.

Storico co. just paid a dividend of $3.15 per share. the company will increase its dividend by 20 percent next year and then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent dividend growth, after which the company will keep a constant growth rate forever. if the required return on the company’s stock is 12 percent, what will a share of stock sell for today?

Robert is a district manager who oversees several store managers in a national chain of restaurants. robert reports directly to the vice president of stores and marketing, a member of top management. robert is a middle manager. t/f