Answered step by step
Verified Expert Solution
Question
1 Approved Answer
AFW Industries has 200 million shares outstanding and expects earnings at the end of this year of $747 million. AFW plans to pay out 56%
AFW Industries has 200 million shares outstanding and expects earnings at the end of this year of $747 million. AFW plans to pay out 56% of its earnings in total, paying 36% as a dividend and using 20% to repurchase shares. If AFW's earnings are expected to grow by 7.3% per year and these payout rates remain constant, determine AFW's share price assuming an equity cost of capital of 11.7%. The price per share will be (Round to the nearest cent.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started