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  3. consider a firm with a forward-looking p/e ratio o

Consider a firm with a forward-looking P/E ratio of 4, a discount rate R=10% and...

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Consider a firm with a forward-looking P/E ratio of 4, a discount rate R=10% and ROE=5%. Suppose the price is equal to the fundamental value given by the DDM. What is the plowback ratio b of the firm?b=_ (answer a number between 0 and 1 with 2 decimals, e.g., 0.12)

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