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Lightpoint Inc. forecasts a net income of $45 million during the coming year, which is expected to grow by 4% per year forever. The company
Lightpoint Inc. forecasts a net income of $45 million during the coming year, which is expected to grow by 4% per year forever. The company plans to pay out 40% of net income as dividends and repurchase shares worth 15% of net income every year. The company has 35 million shares outstanding and a cost of equity of 12%. What is the total payout to shareholders next year (in $ million)? What is the present value of future dividends and repurchases (in $ million)? What is the share price?
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