Shatin Intl. has 9.8 million shares, an equity cost of capital of 12.7% and is expected to
Question:
Shatin Intl. has 9.8 million shares, an equity cost of capital of 12.7% and is expected to pay a total dividend of $20.7 million each year forever. It announces that it will increase its payout to shareholders. Instead of increasing its dividend, it will keep it constant and will start repurchasing $10.4 million of stock each year as well. How much will its stock price increase?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Question Posted: