The market consensus is that Analog Electronic Corporation hasan ROE = 11%, a beta of 1.50, and plans to maintain indefinitelyits traditional plowback ratio of 1/5. This yearâs earnings were$2.50 per share. The annual dividend was just paid. The consensusestimate of the coming yearâs market return is 15%, and T-billscurrently offer a 5% return.
a. Find the price at which Analog stock shouldsell. (Do not round intermediate calculations. Round youranswer to 2 decimal places.)
b. Calculate the P/E ratio. (Do notround intermediate calculations. Round your answer to 2 decimalplaces.)
c. Calculate the present value of growthopportunities. (Negative amount should be indicated by aminus sign. Do not round intermediate calculations. Round youranswer to 2 decimal places.)
d. Suppose your research convinces you Analogwill announce momentarily that it will immediately change itsplowback ratio to 4/5. Find the intrinsic value of the stock.(Do not round intermediate calculations. Round your answerto 2 decimal places.)
The market consensus is that Analog Electronic Corporation hasan ROE = 11%, a beta of 1.50, and plans to maintain indefinitelyits traditional plowback ratio of 1/5. This yearâs earnings were$2.50 per share. The annual dividend was just paid. The consensusestimate of the coming yearâs market return is 15%, and T-billscurrently offer a 5% return.
a. Find the price at which Analog stock shouldsell. (Do not round intermediate calculations. Round youranswer to 2 decimal places.)
b. Calculate the P/E ratio. (Do notround intermediate calculations. Round your answer to 2 decimalplaces.)
c. Calculate the present value of growthopportunities. (Negative amount should be indicated by aminus sign. Do not round intermediate calculations. Round youranswer to 2 decimal places.)
d. Suppose your research convinces you Analogwill announce momentarily that it will immediately change itsplowback ratio to 4/5. Find the intrinsic value of the stock.(Do not round intermediate calculations. Round your answerto 2 decimal places.)
Related questions
| The market consensus is that Analog Electronic Corporation has an ROE = 9%, has a beta of 1.65, and plans to maintain indefinitely its traditional plowback ratio of 2/3. This year's earnings were $2.20 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 11%, and T-bills currently offer a 6% return. |
| a. | Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" 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 | $ |
NEED ASAP
Assume you are given the following relationships for the Haslam Corporation:
| Sales/total assets | 1.4 |
| Return on assets (ROA) | 4% |
| Return on equity (ROE) | 8% |
- Calculate Haslam's profit margin. Do not round intermediate calculations. Round your answer to two decimal places.
% - Calculate Haslam's liabilities-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places.
% - Suppose half of Haslam's liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places.
%
