redskins44

wrong. there is growth in the coming year since the firm retained some NI..(retention ratio of 0.86), which is why you need to find E1 as 2.45(1.15284)= 2.84
then it's asking what percent of the forecasted share price is attributable to PVGO (i.e., without any growth going forward compared to growth)...similar to wondering whether the firm should pay dividends or not, which is all about whether ROE is greater than cost of equity (not necessary for this question though)