Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Valence Electronics has 229 million shares outstanding. It expects earnings at the end of the year of $850 million. Valence pays out40% of its earnings
Valence Electronics has 229 million shares outstanding. It expects earnings at the end of the year of $850 million. Valence pays out40% of its earnings in total- 15% paid out as dividends and25% used to repurchase shares. IfValence's earnings are expected to grow by 6% peryear, these payout rates do notchange, andValence's equity cost of capital is 9%, what isValence's shareprice?
A.
$7.42
B.
$14.85
C.
$49.49
D.
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