Valence Electronics has 213 million shares outstanding. It expects earnings at the end of the year of $740 million. Valence pays out 40% of its earnings in total - 15% paid out as dividends and 25% used to repurchase shares. If Valence's earnings are expected to grow by 7% per year, these payout rates do not change, and Valence's equity cost of capital is 9%, what is Valence's share price? ..... O A. $20.84 O B. $10.42 OC. $55.58 O D. $69 48

Valence Electronics has 213 million shares outstanding. It expects earnings at the end of the year of $740 million. Valence pays out 40% of its earnings in total - 15% paid out as dividends and 25% used to repurchase shares. If Valence's earnings are expected to grow by 7% per year, these payout rates do not change, and Valence's equity cost of capital is 9%, what is Valence's share price? ..... O A. $20.84 O B. $10.42 OC. $55.58 O D. $69 48

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 13P

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Valence Electronics has 215 million shares outstanding. It expects earnings at the end of the year of $800 million. Valence pays out 40% of its earnings in total-15% paid out as dividends and 25% used to repurchase shares. If Valence's earnings are expected to grow by 5% per year, these payout rates do not change, and Valence's equity cost of capital is 9%, what is Valence's share price? A. $5.58 O B. $37.21 OC. $29.77 OD. $11.16
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