The market consensus is that Analog Electronic Corporation has an ROE $=9\%$ and a beta of $1\mathrm{.}30$

and plans to maintain indefinitely its traditional plowback ratio of $\frac{1}{3}.$ This year's earnings were

$$2\mathrm{.}90$ per share. The annual dividend was just paid. The consensus estimate of the coming

year's market return is $11\%,$ 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 $\frac{2}{3}.$ Find the intrinsic value of the stock.

Complete this question by entering your answers in the tabs below.

Required $A$

Suppose your research convinces you Analog will announce momentarily that it will immediately redu

$\frac{2}{3}.$ Find the intrinsic value of the stock.

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

Intrinsic value