The market consensus is that Analog Electronic Corporation has an ROE = 12%, has a beta of 1.55, and plans to maintain indefinitely its traditional plowback ratio of 2/5. This year's earnings were $2.40 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 16%, and T-bills currently offer a 6% return.
a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Price $
b. Calculate the P/E ratio. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
P/E Ratio
Leading
Trailing
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. Omit the "$" sign in your response.)
PVGO $