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The market consensus is that Analog Electronic Corporation has an ROE of 10% and a beta of 1.50. It plans to maintain indefinitely its traditional
The market consensus is that Analog Electronic Corporation has an ROE of 10% and a beta of 1.50. It plans to maintain indefinitely its traditional plowback ratio of 4/5. This year's earnings were $2.1 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 15%, and T-bills currently offer a 5% return. Required: a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price 4 b. Calculate the P/E ratio. (Do not round intermediate calculations. Round your answers to 2 decimal places.) P/E ratio Leading Trailing
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