Castles in the sand generates a rate of return of 12% on its investments and maintains a plowback ratio of .40. its earnings this year will be $3 per share. investors expect a 10% 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 of the plowback ratio is reduced to .30. (do not round intermediate calculations. round your answers to 2 decimal places.) price $ p/e ratio

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.