Question
Video New Productions (VNP) has 200 million shares outstanding. In 2020, VNP's net income will amount to $600 million. VNP has and will continue to
-
Video New Productions (VNP) has 200 million shares outstanding. In 2020, VNP's net income will amount to $600 million. VNP has and will continue to payout 2/3 of total earnings to share holders: 31.29% as dividend and 68.71% to repurchase its shares. We also know that VNP's earnings will growth 5% a year, while its payout policy will remain unchanged over the years. If VNP's equity cost of capital is 10%, please estimate VNP's share price.
$40.00
$60.00
$80.00
$39.05
Video New Productions (VNP) has 200 million shares outstanding. In 2020, VNP's net income will amount to $600 million. VNP has and will continue to payout 2/3 of total earnings to share holders: 31.29% as dividend and 68.71% to repurchase its shares. We also know that VNP's earnings will growth 5% a year, while its payout policy will remain unchanged over the years. If VNP's equity cost of capital is 10%, please estimate VNP's share price.
| $40.00 | ||
| $60.00 | ||
| $80.00 | ||
| $39.05 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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
Payroll Accounting 2016
Authors: Bernard J. Bieg, Judith Toland
26th edition
978-1305665910, 1305665910, 1337072648, 978-1337072649
