Question: 3. 10,00 points value: The market consensus is that Analog Electronic Corporation has an ROE-9% and a beta of 1.95. It plans to maintain indefinitely

3. 10,00 points value: The market consensus is that Analog Electronic

3. 10,00 points value: The market consensus is that Analog Electronic Corporation has an ROE-9% and a beta of 1.95. It plans to maintain indefinitely its traditional plowback ratio of 2/5. This year's earnings were $2.6 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 2 decimal places.) b. Suppose your research convinces you Analog will announce momentarily that it will immediately change its plowback ratio to 3/5. Find the intrinsic value of the stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Intrinsic value of the stock

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