Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Shatin Intl. has 10 million shares, an equity cost of capital 12%, and is expected to pay a total dividend of $18 million each year
Shatin Intl. has 10 million shares, an equity cost of capital 12%, and is expected to pay a total dividend of $18 million each year forever. It announces that it will increase its payout to shareholders. Instead of increasing its dividend, it will keep it constant and will start repurchasing $12 million of stock each year as well. How much will its stock price increase? The stock price will increase by $ (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