The market consensus is that Analog Electronic Corporation has an ROE = 9% and a beta of 2.05. It plans to maintain indefinitely its traditional plowback ratio of 1/3. This year's earnings were $3.8 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.

1A. Find the price at which Analog stock should sell.

1B. 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.