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The market consensus is that Analog Electronic Corporation has an ROE=9% and a beta of 1.25. It plans to maintain indefinitely its traditional plowback ratio

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The market consensus is that Analog Electronic Corporation has an ROE=9% and a beta of 1.25. It plans to maintain indefinitely its traditional plowback ratio of 2/3. Next year's earnings per share is expected to be $3.18. 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 b. Find the leading P/E ratio c. Calculate the present value of growth opportunities d. Suppose Analog announces momentarily that it will immediately reduce its plowback ratio to 1/3. Find the intrinsic value of the stock

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