Question: Just need helping solving for part C, the PVGO The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta
Just need helping solving for part C, the PVGO
The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta of 1.25. It plans to maintain indefinitely its traditional plowback ratio of 2/3. This year's earnings were $3 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.) Answer is complete and correct. Price $ 10.60 b. Calculate the P/E ratio. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete and correct. Leading Trailing P/E ratio 3.33 3.53 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.) Answer is complete but not entirely correct. PVGO $ 6.63 X
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
