Question: Section 2 (show your work for each question in section 2 to get full credit) 35. The market consensus is that Analog Electric Corporation has

Section 2 (show your work for each question in section 2 to get full credit) 35. The market consensus is that Analog Electric Corporation has an ROE - 18% and a beta of 1.25. It plans to maintain indefinitely its traditional plowback ratio of 2/3. This coming year's earnings will be $3 per share. The consensus estimate of the coming year's market return is 14%, and T-bills currently offer a 6% return. At what price and P/E ratio would you expect the firm to sell? What is the present value of growth opportunities? (7 points)

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