Find the price at which analog stock should sell

Assignment Help Operation Management

Reference no: EM131012603

Analog Corp has an ROE of 12% and a beta of 1.5. It plans to maintain indefinitely its traditional plowback ratio of 0.6. This year's earnings were $2.50 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 10%, and the T-Bills currently offer a 4% yield.

Find the price at which Analog's stock should sell.
Calculate the P/E ratio.
Calculate the present value of growth opportunities.
Suppose your information suggest that the company will be reducing its plowback to 0.4. Find the intrinsic value of the stock if the cutback takes effect immediately.

Reference no: EM131012603

Questions Cloud

What is the payment per month for the first option : A car company is offering a choice of deals. You can receive $1,950 cash back on the purchase, or a 5 percent APR, five-year loan. The price of the car is $20,950 and you could obtain a five-year loan from your credit union, at 8 percent APR. What is..

Effective annual interest rate : What is your effective annual interest rate (an opportunity cost) on the revolving credit arrangement if your firm does not use it during the year?

Find a nonconstant monotonically increasing function : Find a nonconstant monotonically increasing function g on (0, 1] such that f ∈ R([O, 1],g), and provide a proof for your assertion.

Compute the allocation of the cash dividend : Prepare a stockholders' equity section at December 31, 2014. Total stockholders' equity $7,140,000

Find the price at which analog stock should sell : Find the price at which Analog's stock should sell. Calculate the P/E ratio. Calculate the present value of growth opportunities.

The average price of an asset : In January 2007, the average price of an asset was $28,658. 8 years earlier, the average price was $22,508. What was the annual increase in selling price?%. One year ago, you invested $3,100.00. Today, it is worth $3,850.00. What rate of interest did..

Sales systems to modernize the restaurant : Task: Research electronic point of sales systems to modernize the restaurant. Consider that the business does trade across state lines and so the system must be capable of accounting, if necessary, any differences in state point of sales system r..

Carlyon company listed following equity items on december : Carlyon Company listed the following equity items on December 31, 2012: During 2013, the following transactions occurred:

What role do you believe it plays in today culture : The term, experience economy was coined in 1998 by Pine and Gilmore and is discussed in the text. How has the experience economy developed since then and what role do you believe it plays in today's culture

User Account

All Pages