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
Section: Chapter Questions
Problem 1PS
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Question
ABC Corp, has 100 million shares outstanding. Analysts expect the firm to have earnings of $500 million in one year. ABC plans to pay out 30% of its eamings in dividends and use another 20% of the earnings to repurchase shares in each year. If the firm's equity cost of capital is 14%, the weighted average cost of capital is 10%, and the eamings are expected to decline at a constant rate of 2% per year, then ABC's stock price per share Instruction Type ONLY your numerical answer in the unit of dolars, NO S sign, NO comma sign, and round it to the nearest integer. Eg your stock price is $ 65, then just input
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