Analog Devices, Inc., is a high-tech manufacturer of specialized semiconductors and integrated circuitry headquartered in Norwood, Massachusetts. Use the following information on Analog Devices and five similar companies to value Analog Devices as of December 31, 1995.AppendixLO1

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Analog Devices, Inc., 1995 ($ millions) Net income Number of common shares Earnings before interest and tax Tax rate Book value of equity Book value interest-bearing debt $ 119.3 114.5 $163.6 25% $656.0 $ 82.4 Using Comparable Public Companies to Value Analog Devices, Inc. (December 31, 1995) Maxim Analog Burr- Linear Integrated Devices Brown Technology Prod. Siliconix Motorola Comparison of Analog Devices with Comparable Companies: Risks, Growth Rates, and Returns Return on invested capital (%) 16.6 15.0 25.5 37.9 27.4 12.9 Return on equity (%) 18.2 16.3 25.5 37.9 26.8 16.1 Liabilities to total capital (%) 34.5 29.0 16.9 22.1 56.6 51.5 5-year growth in sales (%) 14.3 9.9 32.2 43.1 14.0 20.3 Indicators of Value Price/earnings (x) 14.2 25.8 18.7 15.2 18.9 MV firm/EBIT(1- Tax rate) (X) 16.3 26.6 19.4 18.3 24.2 MV equity/BV equity (x) 2.3 6.6 7.1 4.1 3.0 MV firm/BV firm () 1.9 5.6 5.7 2.3 2.0