The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta of 1.65. It plans to maintain ind

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The market consensus is that Analog Electronic Corporation has
an ROE of 9% and a beta of 1.65. It plans to maintain indefinitely
its traditional plowback ratio of 2/3. This year's earnings were
$2.8 per share. The annual dividend was just paid. The consensus
estimate of the coming year's market return is 14%, and T-bills
currently offer a 6% return.
Required:
a. Find the price at which Analog stock should sell. (Do not
round intermediate calculations. Round your answer to 2 decimal
places.)
b. Calculate the P/E ratio. (Do not round
intermediate calculations. Round your answers to 2 decimal places.)
The leading P/E ratio and the trailing P/E ratio.
c. Calculate the present value of growth
opportunities. (Negative amount should be indicated by
a minus sign. Do not round intermediate calculations. Round your
answer to 2 decimal places.)
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. (Do not round intermediate calculations. Round
your answer to 2 decimal places.)