Question: Please solve part a and b The market consensus is that Analog Electronic Corporation has an ROE =10% and a beta of 1.45. It plans

Please solve part a and b

The market consensus is that Analog Electronic Corporation has an ROE =10% and a beta of 1.45. It plans to maintain indefinitely its traditional plowback ratio. of 3/4. 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 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 1/4. Find the intrinsic value of the stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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