Web Cites Research projects a rate of return of 20% on new projects. Management plans to plow back 30% of all earnings into the firm. Earnings this year will be $3 per share, and investors expect a 12% rate of return on stocks facing the same risks as Web Cites. (LO7-2) a. What is the sustainable growth rate?
b. What is the stock price?
c. What is the present value of growth opportunities?
d. What is the P/E ratio?
e. What would the price and P/E ratio be if the firm paid out all earnings as dividends?
f. What do you conclude about the relationship between growth opportunities and P/E ratios?

Exercise: counting committees 0.0/2.0 puntos (calificable) we start with a pool of n people. a chaired committee consists of k≥1 members, out of whom one member is designated as the chairperson. the expression k(nk) can be interpreted as the number of possible chaired committees with k members. this is because we have (nk) choices for the k members, and once the members are chosen, there are then k choices for the chairperson. thus, c=∑k=1nk(nk) is the total number of possible chaired committees of any size. find the value of c (as a function of n ) by thinking about a different way of forming a chaired committee: first choose the chairperson, then choose the other members of the committee. the answer is of the form c=(α+nβ)2γn+δ. what are the values of α , β , γ , and δ ?