The market consensus is that Analog Electronic Corporation has an ROE = 9%, a beta of 1.25, and plans to maintain indefinitely its traditional retention ratio of 2/3. This year's earnings were $3 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.

1) Find the price 0 at which Analog stock should sell.

2) Calculate the P/E ratio (P0/E1).

3Calculate the present value of growth opportunities.