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 years 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.