The market consensus is that Analog Electronic Corporation has an ROE of 8% and a beta of 1.35. It plans to maintain indefinitely its traditional plowback ratio of 2/3. This year's earnings were $2.2 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 16%, and T-bills currently offer a 6% return.

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

b. Calculate the P/E ratio. (leading and trailing)

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 1/3. Find the intrinsic value of the stock.