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Deimos Aerospace believes itself ready for rapid expansion, replying on reinvestment of much of the firm's profits in order to fuel growth. The firm returns
Deimos Aerospace believes itself ready for rapid expansion, replying on reinvestment of much of the firm's profits in order to fuel growth. The firm returns some cash flows to shareholders through both dividend payouts and share repurchases, which will both increase as growth opportunities gradually disappear. You have the following financial information: Earnings in the most recently concluded fiscal year were $269.00 million. Deimos Aerospace will retain all its earnings this year (from t=0 to t= 1), reinvesting in new projects with a return on new investment of 43.2%. The next year (from t=1 to t=2), the company will retain 80.7% of its earnings. Of the money not being retained, the firm will return $43.12 million to shareholders through share repurchases (i.e. at t=1). Return on new investment is expected to be 33.5%. In the following year (from t=2 to t=3), the company will retain 56.3% of its earnings with an expected return on new investment of 22.7%. The firm will pay out $124.03 million of cash through share repurchases at t=2. The company will then retain 39.4% of its earnings in perpetuity. The firm will pay out $214.04 million through share repurchases at t=3. There firm has 175.00 million ordinary shares outstanding today. Which of the following is closest to the expected dividends that Deimos Aerospace will pay out 3 years from now (i.e. at t=3)? O a. $89.81 million O b. $109.62 million O c. $127.40 million O d. $120.40 million e. $115.22 million Of $334.44 million O g. $117.31 million Oh, $350.42 million Deimos Aerospace believes itself ready for rapid expansion, replying on reinvestment of much of the firm's profits in order to fuel growth. The firm returns some cash flows to shareholders through both dividend payouts and share repurchases, which will both increase as growth opportunities gradually disappear. You have the following financial information: Earnings in the most recently concluded fiscal year were $269.00 million. Deimos Aerospace will retain all its earnings this year (from t=0 to t= 1), reinvesting in new projects with a return on new investment of 43.2%. The next year (from t=1 to t=2), the company will retain 80.7% of its earnings. Of the money not being retained, the firm will return $43.12 million to shareholders through share repurchases (i.e. at t=1). Return on new investment is expected to be 33.5%. In the following year (from t=2 to t=3), the company will retain 56.3% of its earnings with an expected return on new investment of 22.7%. The firm will pay out $124.03 million of cash through share repurchases at t=2. The company will then retain 39.4% of its earnings in perpetuity. The firm will pay out $214.04 million through share repurchases at t=3. There firm has 175.00 million ordinary shares outstanding today. Which of the following is closest to the expected dividends that Deimos Aerospace will pay out 3 years from now (i.e. at t=3)? O a. $89.81 million O b. $109.62 million O c. $127.40 million O d. $120.40 million e. $115.22 million Of $334.44 million O g. $117.31 million Oh, $350.42 million
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