Question
In: Finance
The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta...
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.
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 reduce its plowback ratio to 1/3. Find the intrinsic value of the stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Solutions
jeff jeffy answered 6 months agoRelated Solutions
The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta...
The market consensus is that Analog Electronic Corporation has
an ROE of 9% and a beta of 2.05. It plans to maintain indefinitely
its traditional plowback ratio of 2/3. This year's earnings were
$3.8 per share. The annual dividend was just paid. The consensus
estimate of the coming year's market return is 15%, 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
answer to 2...
The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta...
The market consensus is that Analog Electronic Corporation has
an ROE of 9% and a beta of 1.95. It plans to maintain indefinitely
its traditional plowback ratio of 3/5. This year's earnings were
$2.6 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...
The market consensus is that Analog Electronic Corporation has an ROE = 6% and a beta...
The market consensus is that Analog Electronic Corporation has
an ROE = 6% and a beta of 1.30. It plans to maintain indefinitely
its traditional plowback ratio of 3/5. This year's earnings were
$3.0 per share. The annual dividend was just paid. The consensus
estimate of the coming year's market return is 15%, 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
answer to 2...
The market consensus is that Analog Electronic Corporation has an ROE = 23%, a beta of...
The market consensus is that Analog Electronic Corporation has
an ROE = 23%, a beta of 2.20, and plans to maintain indefinitely
its traditional plowback ratio of 2/5. This year’s earnings were
$3.80 per share. The annual dividend was just paid. The consensus
estimate of the coming year’s market return is 15%, 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
answer to 2 decimal...
The market consensus is that Analog Electronic Corporation has an ROE = 24%, a beta of...
The market consensus is that Analog Electronic Corporation has
an ROE = 24%, a beta of 2.25, and plans to maintain indefinitely
its traditional plowback ratio of 2/5. This year’s earnings were
$3.90 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
B) Calculate the P/E ratio
C) Calculate the present value of...
The market consensus is that Analog Electronic Corporation has an ROE = 11%, a beta of...
The market consensus is that Analog Electronic Corporation has
an ROE = 11%, a beta of 1.45, and plans to maintain indefinitely
its traditional plowback ratio of 3/4. This year’s earnings were
$2.60 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...
The market consensus is that Analog Electronic Corporation has an ROE = 13%, a beta of...
The market consensus is that Analog Electronic Corporation has
an ROE = 13%, a beta of 2.00, and plans to maintain indefinitely
its traditional plowback ratio of 3/5. This year’s earnings were
$3.40 per share. The annual dividend was just paid. The consensus
estimate of the coming year’s market return is 11%, 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
answer to 2 decimal...
The market consensus is that Analog Electronics Corporation has an ROE = 13%, a beta of...
The market consensus is that Analog Electronics Corporation has
an ROE = 13%, a beta of 1.80, and plans to maintain indefinitely
its traditional blowback ratio of 3/4. This year’s earnings were
$3.10 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 5% return. a. Find the price at which Analog
stock should sell. (Do not round intermediate calculations. Round
your answer to 2 decimal...
EXERCISE #1: The market consensus is that Analog Electronic Corporation has an ROE = 10% and...
EXERCISE #1: The market consensus is that Analog Electronic
Corporation has an ROE = 10% and a beta of 1.2. 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. Use the CAPM to get the cost of equity: rE =
B. Using the plowback info, the...
Company A has an ROE of 9%, a beta of 1.25, and with a plowback ratio...
Company A has an ROE of 9%, a beta of 1.25, and with a plowback
ratio of 2/3. This year's earnings of A were $3 per share, and the
annual dividend was just paid. The consensus estimate of the
expected market return is 14% in the upcoming year, and the
risk-free return is 6%. Suppose your research suggests that A will
momentarily announce a decision that it will immediately reduce its
plowback ratio to 1/3. The market is still unaware...
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