Problem 18-10 The market consensus is that Analog Electronic Corporation has an ROE = 15%, a beta of 1.60, and plans to i traditional plowback ratio of 3/5. This year's earnings were $2.30 per share. The annual dividend was just p. estimate of the coming year's market return is 14%, and T-bills currently offer a 5% return. a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your a
Problem 18-10 The market consensus is that Analog Electronic Corporation has an ROE = 15%, a beta of 1.60, and plans to i traditional plowback ratio of 3/5. This year's earnings were $2.30 per share. The annual dividend was just p. estimate of the coming year's market return is 14%, and T-bills currently offer a 5% return. a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your a
Chapter11: The Cost Of Capital
Section: Chapter Questions
Problem 10PROB
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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.)
D. Suppose your research convinces you Analog will announce momentarily that it will immediately change its plowback ratio to 2/5. Find the intrinsic value of the stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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