Problem 15-16 Repurchases and the DCF model Surf & Turf Hotels is a mature business, although it pays no cash dividends. Next year's ear are 10 million outstanding shares. The company has traditionally paid out 50% of earnings E remaining earnings. With reinvestment, the company has generated steady growth averagi is 18%. a. Calculate Surf & Turf's current stock price, using the constant-growth DCF model. (Hin market capitalization.) b. Now Surf & Turf's CFO announces a switch from repurchases to a regular cash dividen share. The CFO reassures investors that the company will continue to pay out 50% of e payouts will come as dividends, however. What would be Surf & Turf's stock price? Note: For all requirement, do not round intermediate calculations. Round your answe a. Current stock price b. Stock price