1) What is the expected price and the recommendation should or should not be chnaged?

As an analyst for Whispering Inc., you are responsible for many firms, including ADFC. Currently you have a "hold" recommendation on ADFC. The current price of ADFC is $149. You have conducted an extensive analysis of the industry and you feel that the probability the firm will capture a substantial share of the new market is 40 percent. If the firm is able to capture the new market, you are expecting earnings to grow at a rate of 45 percent per year for the next five years. In that case, the stock price would rise to $229 due to the unusually high growth rate of future earnings. However, you feel there is a 40-percent probability that the firm will face serious difficulties in the near future, in which case the stock price will fall to $109, and the earnings growth rate will drop to 3 percent. There is a 20-percent chance that nothing will change for the firm and its earnings growth rate will remain at 12 percent. Calculate the expected price in the future. (Round intermediate calculations to 4 decimal places, e.g. 31.2125 and final answer to O decimal places, e.g. 145.) Expected price to Should you change your recommendation? The recommendation be changed