Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Shatin Intil. has 10.1 mition shares, an equity cost of capital of 12.9% and is expected to pay a total dividend of $20.6 milion each

image text in transcribed
Shatin Intil. has 10.1 mition shares, an equity cost of capital of 12.9% and is expected to pay a total dividend of $20.6 milion each year forever, it announces that it will increase its payout to shareholders. Instead of increasing its dividend, II will keep it constant and will start repurchasing $10.2 million of stock each year as well. What is your estimate of Shatir's slock price after this announcement? The slock price will be 1 (Round to then nearest cent)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Markets Investments And Financial Management

Authors: Daisy Scott

1st Edition

1639892001, 9781639892006

More Books

Students also viewed these Finance questions

Question

Requlred: Prepare a classified balance sheet

Answered: 1 week ago

Question

Discuss various types of training methods.

Answered: 1 week ago

Question

Illustrate the value of different types of employment tests.

Answered: 1 week ago

Question

Outline key considerations when making a hiring decision.

Answered: 1 week ago