Castles in the sand generates a rate of return of 16 on its, Ask an Expert

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Castles in the Sand generates a rate of return of 16% on its investments and maintains a plowback ratio of .60. Its earnings this year will be $5 per share. Investors expect a 12% rate of return on the stock. a. Find the price and P/E ratio of the firm. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Price $ P/E ratio b. Find the price and P/E ratio of the firm if the plowback ratio is reduced to .50. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Price $ P/E ratio.

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