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The market consensus is that Analog Electronic Corporation has an ROE = 12%, a beta of 2.10, and plans to maintain indefinitely its traditional plowback

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The market consensus is that Analog Electronic Corporation has an ROE = 12%, a beta of 2.10, and plans to maintain indefinitely its traditional plowback ratio of 1/3. This year's earnings were $3.60 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 13%, and T-bills currently offer a 5% 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 $ 14.00 b. Calculate the P/E ratio. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. P/E Ratio 4.48 Leading Trailing 3.89 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.) Answer is complete but not entirely correct. PVGO $ (2.49) X d. Suppose your research convinces you Analog will announce momentarily that it will immediately change its plowback ratio to 2/3. Find the intrinsic value of the stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Intrinsic value $ 9.34

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