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9 9. The market consensus is that Analog Electronic Corporation has an ROE-9%, has a beta of 1.25, and plans to maintain indefinitely its traditional
9 9. The market consensus is that Analog Electronic Corporation has an ROE-9%, has a beta of 1.25, and plans to maintain indefinitely its traditional plowback ratio of 2/3. This year' s earnings were $2 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 10%, and T-bills currently offer a 5% return. Find the price at which Analog stock should sell. () (1.0)
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