"ABC Corp. has a required rate of return of 16%, a constant growth
rate of 7%, a dividend payout ratio of 45%, and an observed P/E ratio
of 7.5. As an analyst, what is your recommendation for ABC's shares?
A) BUY B) SELL C) HOLD D) CANNOT COMMENT"

I know you are mean't to calc. the normal P/E ratio and compare it to
the observed to see if there is a mispricing, expect I don't know how
to do that!
Help would be much appreciated
Thanks
Patrick