Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i cant figure out any parts to this problem The market consensus is that Analog Electronic Corporation has an ROE -23%, a beta of 2.20,

i cant figure out any parts to this problem
image text in transcribed
image text in transcribed
The market consensus is that Analog Electronic Corporation has an ROE -23%, a beta of 2.20, and plans to maintain indefinitely its traditional plowback ratio of 2/5. This year's earnings were $3.80 per share. The annual dividend was just pald. The consensus estimate of the coming year's market return is 15%, and T-bills currently offer a 5% return o. Find the price at which Analog stock should sell. (Do not round intermediate calculations, Round your answer to 2 decimal places.) Prico b. Calculate the P/E tatlo (Do not round intermediate calculations. Round your answers to 2 decimal places.) P/E Ratio Leading Tring c. Calculate the present value of growth opportunities. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) PVGO d. Suppose your research convinces you Analog will announce momentarily that it will immediately reduce its plowback ratio to 3/5. Find the intrinsic value of the stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Intrinsic value

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Day Trading Strategies And Risk Management

Authors: Richard N. Williams

1st Edition

979-8863610528

More Books

Students also viewed these Finance questions

Question

When jones becomes ceo next month, well need your input asap.

Answered: 1 week ago