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The market consensus is that Analog Electronic Corporation has an ROE =15%, a beta of 1.95 , and plans to maintain indefinitely its traditional plowback

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The market consensus is that Analog Electronic Corporation has an ROE =15%, a beta of 1.95 , and plans to maintain indefinitely its traditional plowback ratio of 2/5. This year's earnings were $3.30 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 14%, and T-bills currently offer a 6% return. a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Price b. Calculate the P/E ratio. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete and correct. 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.) 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.)

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