Shatin Intl. has 9.9 million shares, an equity cost of capital of 12.7% and is expected to pay a total dividend of $19.4 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 $10.2 million of stock each year as well. What is your estimate of Shatin's stock price after this announcement?   The stock price will be $ (Round to the nearest cent.) sak rsion his s eful E

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Shatin Intl. has 9.9 million shares, an equity cost of capital of 12.7% and is expected to pay a total dividend of $19.4 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 $10.2 million of stock each year as well. What is your estimate of Shatin's stock price after this announcement?

 

The stock price will be $ (Round to the nearest cent.) sak rsion his s eful E

K
Shatin Intl. has 9.9 million shares, an equity cost of capital of 12.7% and is expected to pay a total dividend of $19.4
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 $10.2 million of stock each year as well. What is your estimate
of Shatin's stock price after this announcement?
The stock price will be $
(Round to the nearest cent.)
ak
rsion
his s
eful t
Transcribed Image Text:K Shatin Intl. has 9.9 million shares, an equity cost of capital of 12.7% and is expected to pay a total dividend of $19.4 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 $10.2 million of stock each year as well. What is your estimate of Shatin's stock price after this announcement? The stock price will be $ (Round to the nearest cent.) ak rsion his s eful t
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