Does anyone know how to a calculate the:Price/Eearning of a stock that has a required return of 15 percent, has an expected growth rate of 8 percent, and a retention ratio of 70 percent.

Boy, you're way over thinking this. The P/E ratio is a simple ratio that requires the price and the earnings per share data but the rest of that is extraneous.If the price is $50 and the earnings per share for the current year are expected to be $3 then the P/E ratio is 50/3 or 16.66. The current P/E ratio of the S&P 500 is approx. 18.You can't figure out the P/E based on the information you provide.

Box815 has this one nailed. I would have thought, as an aside, the P/E for the S&P 500 to be higher because so much trading is still being done as in craps betting: on the come. That is, especially in the dot com era of Initial Public Offerings (IPO), people gave no care to the Earnings side. They were gambling that hot stocks would make significant increase on the Price side, so that they could quickly turn around a stock in 2 weeks and make a 25% Capital Gain sale. Those were the days of the 20-25 P/E ratios. Earnings were not a factor, only an artificially run up Price.

Just an idea... b= retention ratiog= growth ratek= required rate of returnCouldn't you can solve for r using the equation g= br ?Then use that value in the equation:P/E = (1-b) / (k-br)