Question

The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta...

The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta of 1.60. It plans to maintain indefinitely its traditional plowback ratio of 3/5. This year's earnings were $2.5 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 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 2/5. Find the intrinsic value of the stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta...

    The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta of 1.60. It plans to maintain indefinitely its traditional plowback ratio of 3/5. This year's earnings were $2.5 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 5% return. a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2...

  • The market consensus is that Analog Electronic Corporation has an ROE = 11%, a beta of...

    The market consensus is that Analog Electronic Corporation has an ROE = 11%, a beta of 1.50, and plans to maintain indefinitely its traditional plowback ratio of 1/5. This year's earnings were $2.50 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...

  • The market consensus is that Analog Electronic Corporation has an ROE = 14%, a beta of...

    The market consensus is that Analog Electronic Corporation has an ROE = 14%, a beta of 1.85, and plans to maintain indefinitely its traditional plowback ratio of 3/4. This year's earnings were $3.10 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 6% return. a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal...

  • The market consensus is that Analog Electronic Corporation has an ROE = 12%, a beta of...

    The market consensus is that Analog Electronic Corporation has an ROE = 12%, a beta of 1.75, and plans to maintain indefinitely its traditional plowback ratio of 1/4. This year's earnings were $2.00 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 6% return. a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal...

  • The market consensus is that Analog Electronic Corporation has an ROE = 11%, a beta of...

    The market consensus is that Analog Electronic Corporation has an ROE = 11%, a beta of 1.50, and plans to maintain indefinitely its traditional plowback ratio of 1/5. This year’s earnings were $2.50 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...

  • The market consensus is that Analog Electronic Corporation has an ROE = 11%, a beta of...

    The market consensus is that Analog Electronic Corporation has an ROE = 11%, a beta of 1.50, and plans to maintain indefinitely its traditional plowback ratio of 1/5. This year’s earnings were $2.50 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...

  • The market consensus is that Analog Electronic Corporation has an ROE : 13%, a beta o...

    The market consensus is that Analog Electronic Corporation has an ROE : 13%, a beta o 215. and pans to maintain inde nitely ts traditional plowback ratio of 14. This year's earnings were $3.70 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. a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to...

  • The market consensus is that Analog Electronic Corporation has an ROE = 13%, a beta of...

    The market consensus is that Analog Electronic Corporation has an ROE = 13%, a beta of 1.80, and plans to maintain indefinitely its traditional plowback ratio of 3/4. This year's earnings were $3.10 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 5% return a. Find the price at which Analog stock should sell (Do not round intermediate calculations. Round your answer to 2 decimal...

  • The market consensus is that Analog Electronics Corporation has an ROE = 15%, a beta of...

    The market consensus is that Analog Electronics Corporation has an ROE = 15%, a beta of 1.90, and plans to maintain indefinitely its traditional plowback ratio of 1/5. This year’s earnings were $3.20 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 5% return. a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal...

  • The market consensus is that Analog Electronic Corporation has an ROE of 11% and a beta...

    The market consensus is that Analog Electronic Corporation has an ROE of 11% and a beta of 1.90. It plans to maintain indefinitely its traditional plowback ratio of 3/5. This year's earnings were $2.9 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 5% return. a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT