CHAPTER 7 QUIZ 21 TO 25 21. The combined earnings and dividend model considers the present value of dividends plus the present value of a future P/E ratio times future projected earnings. 22. All things being equal, the more rapid growth a firm enjoys the higher the P/E ratio 23. Least squares trend analysis is used to take a simple average of past data 24. With the income statement method of forecasting EPS, you start with a forecast of profits. 25. There is little relationship between R&D expenditures as a percent of sales and growth of earnings per share