Chittenden Enterprises has 620 million shares outstanding. It expects eamings at the end of the year to be $910 million. The firm's equity cost of capital is 10%. Chittenden pays out 30% of its eamings in total: 20% paid out as dividends and 10% used to repurchase shares. If Chittenden's eamings are expected to grow at a constant 3% per year, what is Chittenden's share price? O A. $12.58 O B. $6.29 OC. $1.89 O D. $3.15
Chittenden Enterprises has 620 million shares outstanding. It expects eamings at the end of the year to be $910 million. The firm's equity cost of capital is 10%. Chittenden pays out 30% of its eamings in total: 20% paid out as dividends and 10% used to repurchase shares. If Chittenden's eamings are expected to grow at a constant 3% per year, what is Chittenden's share price? O A. $12.58 O B. $6.29 OC. $1.89 O D. $3.15
Chapter14: Capital Structure Management In Practice
Section: Chapter Questions
Problem 12P
Related questions
Question
![8 of 30 (19 complete)
his Test: 30 pts p.
Chittenden Enterprises has 620 million shares outstanding. It expects eamings at the end of
the year to be $910 million. The firm's equity cost of capital is 10%. Chittenden pays out 30%
of its eamings in total: 20% paid out as dividends and 10% used to repurchase shares. If
Chittenden's eamings are expected to grow at a constant 3% per year, what is Chittenden's
share price?
O A. $12.58
O B. $6.29
OC. $1.89
O D. $3.15
Click to select your answer.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e07bfc9-132b-4ccb-baf9-5eaa0f3ac699%2F1c7667ae-f5e4-450a-9b5d-12d03da607f6%2F9ibavmh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:8 of 30 (19 complete)
his Test: 30 pts p.
Chittenden Enterprises has 620 million shares outstanding. It expects eamings at the end of
the year to be $910 million. The firm's equity cost of capital is 10%. Chittenden pays out 30%
of its eamings in total: 20% paid out as dividends and 10% used to repurchase shares. If
Chittenden's eamings are expected to grow at a constant 3% per year, what is Chittenden's
share price?
O A. $12.58
O B. $6.29
OC. $1.89
O D. $3.15
Click to select your answer.
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