The market consensus is that analog electronic corporation has an roe = 9% and a beta of 2.05. it plans to maintain indefinitely its traditional plowback ratio of 1/3. this year's earnings were $3.8 per share. the annual dividend was just paid. the consensus estimate of the coming year's market return is 15%, and t-bills currently offer a 5% return.
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.)
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.)