The market consensus is that Analog Electronic Corporation has an ROE$=10\%$ and a beta of $1\mathrm{.}40$ and plans to maintain

indefinitely its traditional plowback ratio of $\frac{1}{4}.$ This year's earnings were $$2\mathrm{.}70$ 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.

Required:

a$.$ Find the price at which Analog stock should sell.

b$.$ Calculate the P$/$E ratio.

c$.$ Calculate the present value of growth opportunities.

d$.$ Suppose your research convinces you Analog will announce momentarily that it will immediately reduce its plowback ratio to

$\frac{3}{4}.$ Find the intrinsic value of the stock.